Decoding growth drivers at Masan Group

In a recent meeting with investors, a Masan representative said, “WinCommerce continued to generate profits in August 2024. Previously, the retail chain made profits in June and July. Like-for-like growth of the minimart chain accelerated to over 10 per cent on-year.”

WinCommerce is Vietnam’s largest grocery trade retail platform with nearly 3,700 WinMart supermarkets and WinMart+, and WiN minimarts.

This marks an important milestone in WinCommerce’s retail strategy, as innovation and operational optimisation have generated healthy organic profits. Masan has increased its ownership in WinCommerce to strengthen its control and to drive long-term growth in its core business. The corporation announces its acquisition of a 7.1 per cent stake in WinCommerce from SK Group for $200 million.

Masan shall receive the right to acquire SK Group’s remaining shares in WinCommerce (WCM) in the future at cost. At the same time, SK Group has achieved a successful return on investment by selling a portion of its WCM stake, while continuing its long-term investment in Masan through the extension of the put option.

“We expect third-quarter profits to be higher than the second quarter thanks to the improved profitability of WinCommerce, the growth of Masan Consumer, as well as positive signals from other business segments,” the representative said.

In 2024, most securities firms predict an economic recovery. Among them, the retail and consumer goods sectors are bright spots thanks to cash flows into manufacturing. According to Viet Dragon Securities Corporation (VDSC), the retail sector will gain traction on the back of the manufacturing recovery. Low-interest rates improve consumer confidence, while inflation remains under control.

According to the General Statistics Office, GDP in the second quarter of 2024 grew positively; the growth rate was estimated at 6.93 per cent over the same period last year.

HSBC’s economists believe that Vietnam is likely to be the fastest-growing economy in ASEAN in 2024, a spot it lost to Malaysia and the Philippines in 2022 and 2023, respectively. Given the better-than-expected growth in the second quarter, they predict that the country’s yearly GDP growth will be 6.5 per cent, previously 6 per cent.

Thanks to favourable visa policies and the 2024 tourism promotions launched by localities nationwide, Vietnam witnessed strong growth in international tourist arrivals. GSO also reported that nearly 10 million international visitors arrived in Vietnam in the first seven months of this year, an increase of 51 per cent over the same period last year and 1.9 per cent against the pre-pandemic level in 2019.

SSI Research forecasts that Vietnam will be upgraded in the assessment scheduled for September 2025. With the upgrade to emerging market status, preliminary estimates suggest that capital inflows from exchange-traded funds (ETF) could reach up to $1.7 billion, not including capital from active funds (FTSE Russell estimates that total assets from active funds are five times greater than those from ETF funds).

According to SSI Research, VNM, VHM, VIC, HPG, VCB, SSI, MSN, VND, DGC, VRE, and VCI are stocks that could attract significant capital flows as Vietnam is upgraded to emerging market status. These are all leading blue-chip stocks, but they still have room for foreign investment. MSN and VNM are two consumer staples stocks on the list.

Besides SSI, J.P.Morgan has also shifted its preference to consumer staples, which it believes should reap the double benefits of lower input costs and resilient earnings growth. According to a J.P Morgan report, the government’s push and seasonality is fuelling economic activity through H2, which should spill over to stock market performance during Q4–Q1. “The strong growth versus regional peers reinforces our Overweight (OW) on Vietnam within ASEAN, with key OW sectors: banks (VCB, ACB, TCB), IT (FPT), and consumer staples (MSN),” the report stated.

The international financial institution believes the near-term tailwinds are favouring sStaples stocks with: (1) Potential inflows from emerging market upgrade, (2) Lower USD reduces input costs, and (3) Resilient earnings growth and upgrade the sector to OW with Masan Group (MSN) as one of the top picks.

Using the sum-of-the-parts (SOTP) valuation method, J.P. Morgan has priced MSN at VND94,640 ($3.85) per share, with projected price-to-earnings and enterprise value to earnings before interest, taxes, depreciation, and amortisation ratios of 39x and 12x, respectively, for 2025. The SOTP method involves valuing each subsidiary or business division of a company individually, then combining these values to determine the overall company valuation.

“We are confident that we will complete the profit plan for 2024 with strong growth in the short and medium terms to create superior values for the company’s shareholders,” said Nguyen Dang Quang, chairman of Masan Group.

Positive indicators, including GDP growth, manufacturing, and international tourist arrivals to Vietnam, send a positive signal about the recovery of the economy in general and the consumption market in particular. This trend contributes to promoting the business results of retail and consumer goods enterprises. As an industry leader with continuous positive results from its core retail consumer business, Masan promises to not only complete but also exceed its 2024 profit plan.

How WinCommerce modernises grocery retail in Vietnam WinCommerce, Masan Group's retail arm, is modernising grocery retail in Vietnam with its "New Commerce" consumer model.

SK Group extends the put option for its long-term investment in Masan Group South Korean conglomerate SK Group and Vietnamese corporation Masan Group (HSX: MSN) announced an agreement on September 4 to extend the timeline for SK Group's put option with Masan by up to five years.

Masan calls for IPO reforms to boost Vietnam’s capital market Masan Group has urged the government to streamline procedures for initial public offerings (IPOs) and revise listing requirements to align with international standards, arguing that the current system hampers Vietnam's capital market potential and restricts growth for businesses seeking flexible funding.