Masan’s buyback of its common stock is seen as one of the group’s attempts to respond to the expectations of shareholders.
|Masan will buy back up to 10 per cent of its common stock
Masan Group Corporation (Masan, ticker MSN on HOSE) today announced that the group's Board of Directors has approved the buyback of up to 10 per cent of the company’s total issued shares, subject to market conditions.
Masan believes that the weighted average trading price over the recent period for its shares undervalues the company, which owns and operates market-leading platforms across key sectors of Vietnam’s growing economy.
As such, Masan believes the planned buyback is the optimal use of its cash holdings and reflects Masan’s confidence in its strategic direction and financial outlook. The buyback will be implemented by the company’s disciplined approach to capital allocation and balance sheet optimisation.
The buyback also reflects Masan’s commitment to engaging with and serving its diverse shareholder base. Purchasing shares allows Masan to return cash to its investors who are interested in immediate liquidity, while remaining shareholders can benefit from Masan’s three-year strategic outlook.
With the buyback of its common stock, in addition to the previous buyback of over nine million shares in October 2016, the pay down of expensive debts, and a cash balance to further consolidate stakes in its subsidiaries, Masan aims to increase its return on equity while maintaining its financial discipline and building a healthier balance sheet.
The buyback is subject to customary regulatory approvals and market conditions. Masan said that further details about the buyback will be released later.
Currently, Masan has a chartered capital of more than VND1.157 trillion ($60 million). It is expected that Masan will purchase a maximum number of 115 million shares.
In 2016, Masan’s consolidated revenue was nearly VND26 trillion ($1.1 billion) thanks to a wide range of well-known brands, such as Chinsu and Tam Thai Tu soy sauces, Nam Ngu fish sauce, Omachi and Kokomi instant noodle, and Vinacafe and Wake-up coffee.
Realising the importance of positioning a brand in the success of an enterprise, Masan focuses on both quality and marketing.
In particular, Masan spent about VND1.5 trillion ($66 million) advertising in 2015, an equivalent of 11 per cent of its total revenue. In the first half of 2016, this figure increased by 26 per cent compared to the same period of 2015.
Meanwhile, Masan has been constantly investing in research and development (R&D) activities to come up with new and high-quality products, such as the Omachi Special containing real meat, which was introduced to the market in early 2017.
Masan now possesses a variety of valuable brands in the fields of food and beverage, thanks to their understanding and meeting the daily needs of Vietnamese consumers. The company is now considered one of the Vietnamese enterprises that have the capacity to compete with global brands around the world.