Masan’s retail success and HCS divestiture fuel strong year-end performance

Successful divestment in HCS

On December 18, Masan High-Tech Materials (MHT), a subsidiary of Masan Group, announced the successful sale of 100% of its shares in HC Starck Holding (Germany) GmbH (HC Starck, HCS) to Mitsubishi Materials Corporation (MMC ) Band.

As part of the transaction, MHT and HCS entered into a long-term win-win APT and tungsten oxide offtake agreement, providing a strong anchor to MHT’s order book. Masan also retains positive cash potential through Nyobolt, a UK-based tungsten and niobium-based fast-charging battery technology company poised for large-scale commercialization, as well as future commercialization of battery recycling technology. the black mass developed by HCS.

Masan is divesting from HCS and focusing on consumer retail. Photo courtesy of Masan

Following the transaction, Masan will record a one-time after-tax profit, using the transaction proceeds to reduce MHT’s debt from approximately $670 million to $490 million. This will reduce Masan’s net debt-to-EBITDA ratio to around 3.17x by the end of 2024, in line with its goal of keeping this ratio below 3.5x.

The retail market booming at the end of the year

The holiday season, marked by corporate parties, family gatherings and get-togethers, has led to an increase in consumer shopping demand. Business activity in November 2024 was particularly buoyant as preparations for the 2025 New Year celebrations gather pace.

In November, total retail sales of consumer goods and services at current prices were estimated at 562 trillion dong ($22.49 billion), an increase of 8.8 percent from the same period in November. last year. From January to November 2024, total retail sales reached VND5,822.3 trillion ($232.89 billion), an increase of 8.8 percent compared to the same period in 2023, with a growth rate of 5.8% excluding price effects. Retail sales growth in November marked a four-month high, driven by strong consumer demand.

Graphics by GSO

Economists note that the year-end period typically accounts for 30 to 40 percent of most retail companies’ annual revenue. To take advantage of this, supermarkets run frequent promotions and prepare to meet increased demand. For example, WinMart/WinMart+/WiN, Masan’s retail chain, worked with suppliers months in advance to increase stock levels by 20% compared to last year, ensuring availability products and price stability.

In addition, the National Assembly extended a 2% reduction in value added tax (VAT) for certain goods and services from January 1 to June 30, 2025. This policy is expected to further stimulate domestic consumption, benefiting businesses like Masan.

Strong performance in the third quarter

Masan’s latest financial report highlights its strong performance. In the third quarter of 2024, Masan recorded a profit of VND701 billion ($27.55 million), almost 14 times higher than the same period last year and exceeding 130% of its base profit target .

Net revenue in the third quarter of 2024 reached VND21.487 trillion ($844.4 million), an increase of 6.6 percent from VND20.155 trillion ($792 million) in the third quarter. quarter 2023, driven by sustainable growth in retail business segments. In the first nine months of 2024, Masan achieved net revenue of VND60.476 billion ($2.37 billion), averaging VND220 billion ($8.65 million) per year. day.

Production activities at Masan High-Tech Materials. Photo courtesy of Masan

MSN stock price target at 94,640 VND ($3.72)

In the third quarter of 2024, global financial leader JP Morgan released an investment strategy report recommending increased exposure to Masan Group’s MSN stocks.

JP Morgan predicts that government stimulus and favorable business cycles will boost economic activity in late 2024 and early 2025, positively influencing the stock market.

Masan is recognized as Vietnam’s leading consumer goods conglomerate, with a diversified portfolio and an expanding retail network. JP Morgan set a price target of 94,640 VND ($3.72) per MSN share, with a 2025 price-to-earnings (P/E) ratio target of 39x and an enterprise value/EBITDA target ( EV/EBITDA) of 12x.