M&A in the strategy of building a consumer - retail platform
At the shareholders' meeting in April 2024, Masan said that in the near future, it will not do much about M&A because there are many things developing now. Instead, Masan will focus on optimizing business operations with a focus on the core consumer - retail business segment.
It can be seen that the recent deals made by Masan all focus on the consumer-retail platform: increasing resources to better take advantage of growth opportunities serving consumers, or increasing ownership in core businesses or gradually divesting from non-core businesses.
In early October 2023, Bain Capital - the world's leading private equity fund committed to invest at least 200 million USD in equity capital in Masan Group. More than 2 months later, Bain Capital announced to continue increasing the investment to 250 million USD.
The transaction was completed by both parties on April 22, 2024. Masan said that it is continuously investing in existing platforms and constantly innovating to be ready when the consumer market recovers. The group's goal is to become a factor that brings in many times more profit in the "golden moment" of the consumer story in Vietnam.
Previously, the total capital that the Group has mobilized from abroad since 2007, including equity and debt, is more than 5 billion USD. Funds such as KKR, TPG, SK Group... have invested in Masan 3 times, some other investors have also invested in Masan 1-2 times. It can be seen that Masan has a clear strategy and effective implementation for investors to repeatedly invest in this Group.
Reduce ownership in non-core business segment, buy additional 7.1% of WinCommerce shares
On May 14, 2024, Masan High-Tech Materials - a subsidiary of Masan Group announced a purchase agreement with Mitsubishi Materials Corporation Group (MMC Group) with many strategic contents.
MMC Group plans to buy 100% of H.C. Starck Holding (Germany) GmbH (HCS) from Masan High-Tech Materials (MHT) for $134.5 million. In the opposite direction, on September 4, 2024, Masan Group announced that it will receive a transfer of 7.1% of WinCommerce shares from SK Group.
WinCommerce (WCM) is the company that owns and operates the largest modern retail chain in the country. Increasing ownership in WCM helps MSN increase control and promote growth of core business activities in the long term.
“WinCommerce has entered the profitability phase. We expect this trend to continue to accelerate as we achieve Like-For-Like growth, successfully open new stores and drive the development of the Vietnamese modern retail market in the medium term,” said Danny Le, CEO of Masan Group.
WinCommerce recorded a 9.1% year-on-year revenue growth in Q3/2024, reaching VND8,603 billion across the system, mainly contributed by the new store models WIN (serving urban shoppers) and WinMart+ Rural (serving rural shoppers). Profit after tax reached VND20 billion in Q3/2024 - the first quarter with net profit since the COVID period. This is a clear sign of a sustainable profit-making path in the coming time.
With the successful identification of a profitable retail model, the retail chain has resumed its store openings. WinCommerce's strategic focus in the last quarter of 2024 is to continue to achieve positive after-tax profits, accelerate growth, and accelerate store openings to reach the target of 4,000 points of sale by the end of this year.
Masan Consumer IPO
At the 2024 annual general meeting of shareholders, Masan representative shared about the IPO plan of Masan Consumer (a member company of Masan). This roadmap is becoming clearer with positive information from the business.
With its leading position in the consumer goods industry and impressive business growth in recent years, Masan Consumer (Stock code: MCH) has no difficulty meeting the listing requirements (currently trading on UPCoM). The continuous increase in MCH's stock price with high liquidity is a testament to the market's strong confidence in the company's achievements over the past time.
On October 2, Masan Consumer announced the Board of Directors' resolution approving the transfer of MCH shares from UPCoM to listing on the Ho Chi Minh City Stock Exchange (HOSE). At the same time, it sought shareholders' approval to pay interim dividends for 2024 from the company's retained earnings, with a maximum interim dividend of 100% (ie 1 share will receive a maximum interim dividend of 10,000 VND for 2024).
In addition, the successful IPO of Masan Consumer will help increase the valuation of Masan stocks such as MCH, MSN and this roadmap is becoming clearer with positive information from businesses and the market.
The positive business results of the consumer retail business clearly reflect the strong recovery of Masan as well as the consumer market in the first 9 months of 2024. Looking forward to the last quarter of 2024, according to the management, Masan is confident that it will approach the 2024 profit plan at VND 2,000 billion with strategic initiatives throughout the core consumer retail business.
