With abundant liquidity, Masan stock is a quality investment in 2024
With optimistic business prospects, Masan Group receives a lot of interest from domestic and international investors. Masan share price (MSN) is entering a good price zone, promising to be an attractive investment in the foreseeable future.
Market opportunities
Vietnam's economy and consumer market are on a path of recovery from a low base in 2023. Therefore, manufacturing and retail companies will benefit, attracting cash flow from investors, creating momentum for stock prices to go up. This is one of the positive impacts on Masan share price.
In 2024, most financial institutions share the same forecast for Vietnam's economic recovery. The International Monetary Fund, World Bank and Asian Development Bank forecast that Vietnam's economy will grow by 6.9%, 5.5% and 6% in 2024. Accordingly, Vietnam continues to be one of the fastest growing countries in the world. Compared to some countries in the region, Thailand's growth is expected to range from 2.7% to 3.7%, Indonesia from 4.9% to 5%, Singapore from 2.1% to 4.8% and Malaysia from 4% to 4.9%,... Vietnam shows a stronger recovery momentum and the highlight may come from the consumer and retail industry.
According to recent data from the General Statistics Office, the consumer price index (CPI) in the first quarter of 2024 increased by 3.77% compared to the same period in 2023. Of the 11 main consumer goods, 10 showed increased growth and only 1 group decreased.
CPI increase/decrease rate in the first quarter of 2024 compared to the same period last year (Photo: General Statistics Office)
Consumer stimulus policies issued by the Government have been showing effectiveness. Low interest rates and under control inflation are driving forces to stimulate consumer shopping needs. In addition, the VAT reduction policy will continue to be maintained, and wage reform will officially be implemented in 2024. Along with increasing consumer demand is a favorable environment for businesses in the industry, including Masan, to increase revenue and expand operations.
Positive business prospects
Specifically, Masan Group sets a business plan for 2024 with expected revenue of 84,000 billion VND - 90,000 billion VND, an increase of 7.3% - 15%. Profit after tax is expected to range from 2,250 billion VND to 4,020 billion VND, an increase of 31% - 115% compared to 2023.
Masan’s core consumer company, Masan Consumer Holdings, continues to grow, targeting double-digit revenue and profit growth, from 15 to 25% in 2024. WinCommerce, with 3600 WinMart/WinMart+/WIN supermarkets and 8 million WIN membership, are on track to reap sustainable profits. The global FMCG platform showed positive results in 2023 with CHIN-SU chili sauce ranked top 8 best-selling products on Amazon (USA) and top 1 on e-commerce platform Coupang (Korea). MEATDeli started to attract consumers on a large scale. The development strategies and establishment of the consumer-technology ecosystem POL or Go Global are highly appreciated by investors for their long-term prospects.
CHIN-SU chili sauce reached top 8 Best Seller on Amazon e-commerce platform
According to SSI Research, Masan's profit is likely to increase by 177.4% to 1,161 billion VND in the 2024 business year. Similarly, BSC Research, BVSC Research and HSC also provide similar positive profit growth prospects, forecast increases of 204.1%, 294.4% and 399% respectively. Positive business prospects are also expected to be reflected in Masan share price in the near future.
With a fast-growing economy, the expansion of the middle class and increasing urbanization, Vietnam is entering a new phase of modern retail. Therefore, creating opportunities for Masan share price to increase sharply in the coming years. According to JPMorgan: "Vietnam represents the most exciting and remarkable consumer growth story in Asia." This prestigious financial institution values Masan share price at 102,000 VND/share, which is 54% higher than the market price of 66,500 VND/share on April 19.
Many financial institutions also believe that Masan share price is ready to break through after accumulation time. With a solid corporate foundation and optimistic market outlook, Masan stock shows sustainable profit potential for shareholders in the future.
End of 2023, KBVS recommends buying MSN stock with the nearest target price of 78,600 VND/share. This was based on the expectation of recovery of the retail - consumer industry and Masan’s reduced financial pressures.
Or like HSBC maintains its BUY recommendation on Masan shares with a new price target of 98,000 VND, up from the previous recommendation of 91,000 VND.
According to an analysis report in April, HSC Securities Company said that Masan's difficult period was over. At the same time, raising the target of Masan share price by 21% to 92,900 VND, recommending BUY.
Masan Consumer Holdings' IPO
Stock prices often perform well when businesses receive positive news.
In 2024, investors paid special attention to the initial public offering (IPO) story of Masan Consumer Holdings (MCH), a member company of Masan’s consumer ecosystem. MCH produces a variety of foods and beverages, including sauces, noodles, cereals, instant coffee and beer. In 2023, this company recorded 29,066 billion VND in net revenue and 7,431 billion VND in EBITDA.
According to Bloomberg, Masan Group is cooperating with financial consultants on the IPO issue of Masan Consumer Holdings. MCH's IPO is expected to raise 1 to 1.5 billion USD for the company. If successful, this will be the largest IPO deal on the Vietnamese stock exchange to date, surpassing the 1.4 billion USD IPO of Vinhomes (VHM) in 2018.
HSBC said the IPO will help MCH stock have higher liquidity. At the same time, it evaluates that Masan Consumer accounts for 52% of the value of Masan Group, according to the SOPT (sum of component values) valuation method. Therefore, when MCH is revalued at IPO, the Masan share price will also benefit, reflecting true business prospects of the group and its member and affiliated companies.
Quality IPO deals not only bring strong foreign capital to domestic businesses but also contribute to improving the business environment, promoting innovation and creating many jobs. For investors, this is an opportunity to participate in businesses with high growth potential and be part of the regional economic development story.
After MCH's IPO news was shared by Bloomberg, Masan Consumer and Masan share price immediately reacted positively. During the strong correction on April 17, VN-Index lost more than 22.7 points, breaching the psychological support threshold of 1,200 points, Masan share price was still against the market flow. MSN became a highlight among blue-chips, increasing 1.1% that day. And while the stock market fell for 4 consecutive sessions, MCH stock price still increased for 3 sessions.
Abundant liquidity
Notably, according to the fourth quarter 2023 financial report, Masan currently has nearly 17,000 billion VND in cash and bank deposits. This means that the business is in the top 20 companies with the largest amount of cash on the stock exchange. This partly brings a positive view of investors, affecting Masan share price.
Masan's Free Cash Flow (FCF) has improved to 7,454 billion VND in 2023, a significant increase compared to 887 billion VND in 2022. With foreign investment capital of 250 million USD from Bain Capital and cash amount after MCH and TCB pay dividends, Masan's total cash and cash equivalents will reach 1 billion USD in the near future. Masan has also completed full payment of debt obligations due in 2023. Accordingly, liquidity is no longer a concern for Masan in the near future.
Growing revenue, abundant liquidity, and efforts to reduce profits in the non-core consumer business will help Masan sharply reduce financial pressure, optimize profits for the group and value for shareholders. Therefore, Masan share price also benefits greatly.
Besides, a factor that has the potential to greatly impact Masan share price is the story of upgrading to emerging market status of the Vietnamese stock market. With key issues in the upgrade process being quickly resolved by the Government, Vietnam is closer to its goal than ever.
Mr. Tran Hoang Son, Director of Strategic Analysis of VPBank Securities, shared that: Vietnam's stock market has experienced 3 major growth waves, including: the wave of joining the WTO in 2007, the wave of state divestment at businesses in 2016 - 2017, there was a wave of cheap money during the period when the economy was affected by the Covid-19 pandemic in 2020 - 2021. And now "the market is preparing for the fourth wave - the market upgrade wave".
In a recent report, SSI Securities forecasts that Vietnam's emerging market upgrade could take place as early as September 2024 (according to the positive scenario) or March 2025 (according to the basic scenario) and will take effect 6 months later. SSI also said that Vietnam's stock market can immediately attract capital flows of 1.7 - 2.5 billion USD when the upgrade decision takes effect. According to MSCI and FTSE Russell, a successful upgrade will help Vietnam attract 25 billion USD of investment capital by 2030.
According to Mirae Asset's report, when foreign capital flows into Vietnam, stocks in the current FTSE portfolio will be the first to benefit. Meanwhile, BSC Research believes that large capitalization stocks in VN30-Index, as well as other stocks that meet the criteria for liquidity, capitalization, and foreign ownership ratio, are also considered by investors.
In the case of Masan stock, MSN meets all of the above favorable conditions. Currently, Masan stock is listed on HOSE, in the stock list of FTSE and in the VN30 blue chips basket with the largest liquidity and capitalization in the market. In case Vietnam is upgraded by organizations to the emerging market, MSN will be one of the wave-leading stocks of the market. Masan share price faces an opportunity to break through with foreign capital flows, bringing more value to shareholders.
Among current investment opportunities, Masan, with Masan share price currently accumulating well, is considered one of the options worth considering. With financial stability, abundant working capital and positive growth potential, Masan is a notable investment opportunity in 2024.