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Wednesday, September 22, 2021

Securities firms cast optimistic outlook about Masan’s stock price

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Many prestigious securities companies and organizations, such as Credit Suisse, HCMC Securities Corporation (HSC) and Viet Capital Securities Joint Stock Company (VCSC), have made positive forecasts about Masan’s business results and raised the target price of its MSN stock.

MSN’s market price is hovering around VND133,000. Over the past month, the market underwent a sharp correction and the VN-Index lost 7%, but MSN reported a growth of 13%.

Since early this year, MSN has soared nearly 40%, outpacing the 15% increase of the VN-Index.

With positive achievements and an optimistic prospect in the future, Masan is expected to bring more benefits for investors.

VinMart’s online shopping and delivery services have grown strongly.

MSN’s target price predicted to reach VND172,000

In the retail segment, the stock broker VCSC has been optimistic about the prospect of VinCommerce, a subsidiary of Masan and the operator of the VinMart and VinMart+ chains. Up to 2,504 VinMart+ stores, or 91% of this retail chain, reported a positive earnings before interest sums, taxes, depreciation and amortization (EBITDA) in June, much higher than the 827 profit-making stores in the same month last year.

In addition, VinCommerce’s sales per square meter is on the rise. VCSC affirmed its upbeat view about MSN’s further growth in the consumer goods segment as the group owns leading consumer goods enterprises in the fast-moving consumer goods (FMCG), branded meat and essential goods retail sectors.

Therefore, in its report released on August 16, VCSC continued recommending investors to buy MSN shares. VCSC even forecast MSN’s target price at VND172,000, or 28.8% higher than the current market price, at VND133,500 on the date, and 21% higher than MSN’s target price in its previous report, at VND142,500.

In a report issued on August 10, Credit Suisse predicted MSN’s target price at VND162,000.

MEATDeli’s meat products are put on shelves of a VinMart+ store.

According to experts from Credit Suisse, Masan’s business lines have been expanding well and promising to produce more positive results in the remaining months of the year, especially the consumer goods and retail segments.

As for the FMCG segment, the demand for instant noodles and spices has continued rising in the third quarter of the year. This is an indispensable trend as more consumers have chosen to do the cooking at home amid the complicated Covid-19 pandemic and social distancing extension in many large cities.

This quarter, Masan Consumer Holdings’ sales were expected to surge 45% year-on-year. Its sales may obtain a double-digit growth in the second half of the year.

In the retail segment, VinCommerce was predicted to continue achieving success thanks to consumers’ trend to shop via modern and online channels instead of at traditional wet markets.

In July, VinCommerce’s retail outlets recorded a same-store sales growth of 11% over the previous month due to a higher demand for essential goods during the social distancing period.

Moreover, its online sales segment has posted a positive growth. Masan’s leaders expected to boost the segment’s development in the near future thanks to its cooperation with Lazada.

Masan has set a target to increase the number of VinMart+ stores to over 3,000 this year.

Achieving success thanks to the consumer-centric strategy

According to HSC, Masan’s business performance in the first half of 2021 was better than expected and the results in the second half will be more positive thanks to the group’s good strategies and satisfaction of customers’ demands.

As social distancing has been extended, the demand for packaged food has surged. According to Kantar Worldpanel, sales of packaged food in the first half of July rocketed 35% over the year-ago period as residents bought food for stockpiling. In addition, consumers have stocked up on many other products, such as processed meat and instant noodles, in which Masan has been accounting for a large market share.

To protect consumers and supply chains, Masan has proposed the Ministries of Health and Industry and Trade prioritize Covid-19 vaccines for retail staff and workers at its factories. More than 10,000 of Masan’s employees have been vaccinated against Covid-19.

A consumer goods production line of Masan.

The group has also proposed the prime minister and local authorities allow its employees to stay at schools, warehouses, stadiums and indoor stadiums near its factories after work.

Masan’s initiatives to attract more customers, diversify products and increase benefits for consumers have helped foster VinCommerce’s development. At some VinMart+ stores, more than 40% of the shelves accommodate fresh food. Since July 26, VinCommerce has presented insurance packages worth up to VND40 million each for all customers of VinMart and VinMart+ with bills of VND300,000 and over each.

The Phuc Long kiosk model inside VinMart+ stores in Hanoi, HCMC and Bac Giang has showed positive signals, encouraging Masan’s leaders to accelerate the development of the model.

As for Masan MEATLife, BVSC realized that sales of animal feed, especially pig feed, have surged, and sales of poultry and seafood feed have also increased.

Further, sales of Masan MEATLife’s cool meat products have picked up as consumers prefer branded packaged meat besides fresh meat and moved from traditional shopping channels to modern ones.

VinMart provides fresh and high-quality products.

Regarding the industrial material business, the global economic recovery has sent the metal prices up, helping Masan High-Tech Materials recover impressively in the first half of this year.

Due to the group’s strong potential growth in all business lines, leaders of Masan Group told shareholders at a meeting on August 2 that the group’s consolidated revenue in the third quarter of the year might surge 30% year-on-year.

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