First Read Masan Q226: Big beat driven by robust results across all business segments

Research evidence excerpt

First Read Masan Q226: Big beat driven by robust results across all business segments

Forecast returns

Forecast price appreciation 64.3%

Forecast dividend yield 1.9%

Forecast stock return 66.2%

Market return assumption 9.4%

Forecast excess return 56.8%

Company Description

Masan Group is an investment holding company that engages in four main segments: 1) food

and beverage through Masan Consumer; 2) meat value chain and animal feed through

Masan MeatLife; 3) mineral resources and chemical processing through Masan Resources and

4) grocery retailing via acquisition of Vincommerce in late 2019. The group also has exposure

to financial services through its associate Techcombank, one of the largest joint stock

commercial banks in Vietnam. The company was listed on the Ho Chi Minh Stock Exchange in

2009, becoming the sixth largest company in Vietnam by market capitalisation at the time.

Valuation Method and Risk Statement

We derive our price target based on a SOTP approach, using the following methodologies:

DCF for Masan Consumer and WinCommerce, PE for Masan MeatLife, EV/EBITDA for Masan

Resources, current market value for Techcombank and book value for other long-term

investments.

We believe company-specific risks include: 1) inadequate strategic planning, resulting in an

inability to meet long-term strategic objectives; 2) increasing competition, resulting in margin

pressure and market share losses; 3) risks from operational errors; 4) inventory obsolescence

and ineffective inventory life cycle management; 5) social media risk that may lead to

reputation damage; 6) management succession risk where key roles in the company are

satisfactorily filled within an acceptable time frame; 7) IT system failures; 8) product