Masan Group Corporation (HSX: MSN) has announced a 20 per cent increase to its cash dividend for the 2021 financial year, paying out VND1,200 (5.2 US cents) per share.
|Masan Group plans to increase its 2021 cash dividend by issuing 5:1 bonus shares for existing shareholders |
The additional VND200(0.87 US cents) per share would result in a combined VND250 (1.1 US cents) per share to be paid in late December 2021 as VND950 ($4.1) per share has already been paid to shareholders on July 16, 2021. In combination with the increased cash dividend, Masan’s Board of Directors has approved to seek the opinion of the General Meeting of Shareholders for the issuance of bonus shares at a 5:1 ratio to its existing shareholders as of the book-closing date.
Over the past two years, the company’s shareholders have remained patient as Masan implemented its turnaround plan for WinCommerce (WCM), laid the foundation for its “mini-mall” concept, and realigned the group's business units to evolve into a pure consumer platform. Masan's management view these corporate actions as a way to reward shareholders while adhering to its balance sheet’s medium-term target, which has significantly strengthened in 2021. The issuance of bonus shares is also expected to benefit shareholders with improved trading liquidity since management believes the continued roll-out of its mini-mall concept will drive significant shareholder value creation.
Management has outlined a preliminary 2022 plan to re-expand the number of mini-market locations (Winmart+) by 700-1,000 in 2022 to reach 3,300-3,600 in total by the end of the year. Masan also has plans to convert at least 50 per cent of its existing Winmart+ locations into mini-malls, which currently combines WinMart+ (grocery), Phuc Long Kiosk (coffee and tea), pharmacy, Techcombank (financial services), and Reddi (mobile telecommunication) to provide consumers an integrated loyalty offering. Masan believes the mini-mall concept can drive value creation by improving the profitability of WCM despite the costs of re-expansion as more products and services are offered to drive higher foot traffic.
|Masan believes the continued roll-out of its mini-mall concept will drive significant shareholder value creation |
In addition, the concept will accelerate the time for new stores to break even via better unit economics due to revenue sharing schemes with kiosk brands. It will also help Masan to strengthen its position in the south and rural regions. The group is building a digital platform with Reddi at the core to transform Masan into a consumer-tech platform and generate new consumer and digital use cases that will lead to sustainable long-term growth.
In late December 2021, Masan and Masan Horizon expect to receive a cash dividend of VND1.406 trillion ($61.13 million) from subsidiary Masan MEATLife, as part of the company’s overall treasury initiative to upstream excess to the group level.
The VND250 per share will represent VND295 billion ($12.83 million) in total cash and the bonus issuance will increase MSN share count by more than 236 million to 1.4 billion.