Masan Consumer’s road map for IPO gets new move

Masan Consumer Corporation, with the stock code of MCH, on Wednesday announced a decision by its board of directors to leave the Unlisted Public Company Market, or UPCoM, for the Ho Chi Minh City Stock Exchange (HOSE).

At a meeting with investors in early May, Danny Le, CEO of Masan Group, revealed a plan to mobilize capital this year, stating that with Masan Consumer’s average growth rate at 15 percent a year over the past six or seven years, it was high time to consider launching its initial public offering (IPO).

Achieving double-digit growth rate for seven consecutive years

Masan Consumer boasts an outstanding history of stable business with high growth rates, better than other companies in the fast-moving consumer goods (FMCG) and packaging industries in the region.

Particularly, between 2017 and 2023, Masan Consumer recorded an impressive growth rate, up over 2.2-fold compared to the market’s rate, according to an HSBC report.

The report also emphasized the company’s plan to list its MCH shares on HOSE. The financial service group said that Masan Consumer’s plan to move its shares to HOSE would help MCH improve its liquidity and matches the firm’s remarkable capability as it has paid off over the past several years. Masan Consumer is going according to its strategic road map. Besides, a successful IPO will help elevate the value of MCH and MSN, the stock of Masan Group Corporation.

The IPO road map is becoming more clearly visible with multiple positive moves by the firm and the local market.

Serving 98 percent of Vietnamese households

Starting with the seasoning industry, Masan Consumer has expanded its reach to eight main consumer goods sectors in Vietnam and owns five brands generating US$150-250 million in revenue a year. These brands are popular among millions of Vietnamese consumers, including CHIN-SU, Nam Ngu, Omachi, KOKOMI and Wake-up. The five ‘Big-Brands’ represent about 80 percent of Masan Consumer’s total revenue in Vietnam.

Over 98 percent of Vietnamese households are consuming at least one Masan Consumer product, according to international market research company Kantar. CHIN-SU and Nam Ngu are the most-chosen brands in urban areas, while four food brands Nam Ngu, CHIN-SU, KOKOMI, and Tam Thai Tu are purchased the most by consumers in rural areas in Vietnam, according to a report by securities company HSC. Masan Consumer has a strong loyal client base in both rural and urban areas which is ready to experience the firm’s new products and helps spur the sales of different categories.

Its latest report indicated that Masan Consumer continued its record growth streak of 2023, enjoying positive business results in the second quarter of 2024. Masan Consumer saw revenue growth of 14 percent and maintained a gross profit margin of a staggering 46.3 percent.

In the second quarter of 2024, the convenience food, beverage, and coffee industries took the lead in the growth race, recording the representative year-on-year increases of 20.7 percent, 17.6 percent, and 16 percent. Moreover, the firm’s ‘Go Global’ strategy produced positive business figures, with export revenue climbing 17 percent year on year.

A customer selects Masan Consumer products at a WinMart supermarket

A boost from market upgrade

The Ministry of Finance passed Circular 68/2024 on September 18, which includes a new term allowing foreign investors or institutions to purchase Vietnamese stocks with non-pre-funding starting November 2, 2024.

The new policy demonstrates a closer step toward meeting the criteria of FTSE Russell, a British provider of stock market indices and associated data services, to upgrade the Vietnamese stock market to an emerging one from the frontier.

SSI Research predicted that the Vietnamese stock market will be upgraded in September 2025. After being reclassified as an emerging market, Vietnam is estimated to get up to $1.7 billion in inflows from exchange traded funds (ETFs). The figure excludes capital from active funds, whose total assets are five times greater than those from ETFs, as projected by FTSE Russell. Furthermore, the regulatory change will act as a positive catalyst for enterprises to launch IPOs in 2025 like Masan Consumer.

The MCH stock will be one of the potential choices in Vietnam if foreign investors wish to tap the local FMCG industry and make long-term investments in a company with stable business conditions, impressive growth rates, and high dividend payouts.

With its astonishing growth, Masan Consumer has drawn much attention from a slew of local and international investors. A recent resolution issued by Masan Consumer’s board of directors unveiled that a series of major investment funds are holding the firm’s shares. Specifically, Albizia Asean Tenggara Fund owns 3,891,258 MCH shares, while Vietcap Securities JSC and Bill & Melinda Gates Foundation hold 2,700,800 and 1,041,100 MCH shares, respectively.

In 2024, Masan Consumer set a target of maintaining its double-digit revenue and profit growth, looking to book VND32.5-36 trillion ($1.3-1.45 billion) in net revenue. The firm aims to own six brands with a value of $1 billion, earn 10-20 percent of its revenue from the global market, as well as improve the quality of its products, diversify consumption markets, and beef up the access of its products to eight billion people worldwide.

Source: Tuoi tre News