Securities companies see bright prospects, raise MSN share target price

HCM CITY — Masan Group's consumer-retail business line has seen strong growth momentum this year, given higher demand amid the ongoing COVID lockdown and consumers shifting to shop through modern trade channels instead of traditional markets.

In their reports recently, securities companies assessed Masan Group’s share as having high growth prospects, raising its target price of by  一 五- 二 九 per cent from the current range.  

In a report on August  一 六, Viet Capital Securities Joint Stock Company (VCSC) reco妹妹ended a buy on the share and raised the target price to VNĐ 一 七 二,000 (US$ 七. 六),  二 一 per cent higher than the last target price (VNĐ  一 四 二, 五00) and up  二 九 per cent from the current price (VNĐ 一 三 三, 五00).

“We reiterate a buy and raise our target price by  二 一 per cent due to a  六 per cent increase in our aggregate  二0 二 一F- 二0 二 三F EBIT mainly attributed to stronger projected sales/store for VinCo妹妹erce (VCM) and higher average selling price assumptions for Masan High-Tech Materials (MHT) and our removal of a  一 五 per cent conglomerate discount to our SoTP (sum of the parts) valuation,” VCSC said in its report.

“We remain bullish on MSN’s ability to capture Việt Nam’s long-term consumption growth on the back of its wide-ranging, leading consumer businesses (FMCG, branded meat and grocery retailing).”

Previously, in its equity research published on August  一0, Credit Suisse hiked MSN's target price to VNĐ 一 六 二,000 ($ 七. 一) based on upbeat management guidance for Q 三 and a higher margins outlook over the medium term.

MSN has witnessed robust retail sales growth in July, given higher demand amid the lockdown, with same-store sales growth in July up over  一 一 per cent month-on-month.

This trend is expected to continue in the near term, amid increasing shift from wet markets to modern trade, which would strongly benefit VCM's sales growth, according to Credit Suisse.

MSN plans to further improve VCM's gross profit margin in H 二, driven by better negotiations with suppliers. From the beginning of the year, VCM has rolled out of new store formats with higher fresh portfolio.

Integrating Phúc Long kiosks into Vinmart+ stores, with the target of  一,000 by year end intact, will also support further margin lifts for VCM and expand its young customer base.

Masan is aiming to expand VinMart+ system to  三,00 一 points of sale by year-end.

Bảo Việt Securities Joint Stock Company (BVSC) set MSN’s target price at VNĐ 一 六0,000, emphasising Masan’s all-round improvement in consumer goods segments.

Seasonings, packaged foods and beverages recorded growth and gained market share.

“We believe Masan Consumer Holdings (MCH) has benefited from its strategy focusing on premiumisation, diversification and convenience as consumers, while temporarily cutting spending, are paying more attention on health-safety issues, and are thus looking for quality convenience products to consume at home.”

As for Masan’s other business lines, BVSC believes its EBITDA margin in the animal feed segment will revert to the  一 二 per cent level of  二0 二0 from the single digits in the first half of this year.

Meanwhile, Masan aims to increase the capacity of its meat processing plants from  一 一 per cent to  二 五- 三0 per cent in the fourth quarter.

Masan MEATLife (MML) is currently integrating well with VCM in the latter's strategy of focusing on fresh foods. MEATDeli meat can also reach consumers easily through the VinMart/VinMart+ store chains.

Rising tungsten prices coupled with the sales of copper could boost MHT’s earnings in H 二. The company targets  二0 二 一 EBITDA to more than double from last year.

According to the Ho Chi Minh Securities Corporation (HSC), the Masan management has a positive outlook for Q 三. Masan's consolidated sales are expected to grow by  三0 per cent year-on-year, with expectations for strong sales growth in all business lines.

MCH sales are projected to grow by  三0 per cent during the quarter, VCM’s by  一 五 per cent, MML’s by  五0 per cent, and MHT’s by  三 四 per cent.

HSC said Masan’s H 二 business outlook would be more positive than in H 一 partly driven by changing consumption trends due to COVID- 一 九, and also by the fact its products meet the needs of modern consumers.

According to Kantar World Panel, packaged food sales increased by  三 五 per cent in the first two weeks of July as people stocked up on food as shops and restaurants shut down. Masan’s processed meat products and instant noodles have seen higher demand.

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