Masan Group’s profit soars in 2021; TCX to power 2022 growth

Thursday, Feb 10, 2022 16:59


People shop at a Winmart store in Ha Noi. In 2021, Masan reported consolidated net revenue of VND88.6 trillion, a rise of 14.8 per cent year-on-year. — Photo courtesy of Masan

Masan (stock code: MSN) expects its consolidated net revenue to reach between VND90 trillion and VND110 trillion (US$3.9 billion and $4.7 billion) in 2022, representing a growth of 22 per cent and 36 per cent compared to 2021’s result of VND74.2 trillion.

According to its detailed analysis on its unaudited management accounts for the fourth quarter and financial year 2021 on Wednesday, revenue contribution from consumer businesses (excluding feed and Masan High-Tech Materials) was 68 per cent in 2021 and is projected to improve to 85 per cent in 2022.

Core NPAT Pre-MI (excluding one-time gains/losses and feed segment) is expected to be within the range of VND5 trillion and VND7 trillion, a growth of 32 per cent to 84 per cent compared to VND3.8 trillion in 2021.

In 2021, Masan reported consolidated net revenue of VND88.6 trillion, a rise of 14.8 per cent year-on-year. Net revenue in the last quarter rose 10 per year to VND23.8 trillion.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 58.1 per cent year-on-year to nearly VND16.4 trillion, primarily driven by the CrownX (TCX) increasing EBITDA by 72.9 per cent.

Reported core net profit after tax post-minority interest (NPAT Post-MI) grew by 593.9 per cent to VND8.6 billion compared to VND1.23 trillion in 2020.

“We have solidified our offline mini-mall concept and are ready to expand nationwide, but the next wave is to transform The CrownX into a consumer-tech platform. 2022 will be the year we digitalise our platform into an integrated system from manufacturing, logistics, distribution all the way up to 100 million consumers,” said chairman Nguyen Dang Quang.

Quang said this will drive 10 per cent operational cost efficiencies and, most importantly, combine the company’s traditional consumer insights with AI and machine learning insights to better serve consumers products and services they truly desire.

“By doing so, we envision a consumer-tech platform that accelerates our growth potential and delivers strong profits,” he said.

Despite COVID-19 adversely impacting store expansion, innovation launches and supply chain/production operations pushed net revenue of the CrownX (TCX), Masan’s integrated consumer-retail platform that consolidates WinCommerce (WCM) and Masan Consumer Holdings (MCH) up 6.9 per cent last year to reach VND58 trillion, the report said.

Net revenue was up 12.6 per cent in the last quarter, signalling growth momentum heading into 2022.

Separately, WCM delivered VND30.9 trillion in net revenue last year, down 0.3 per cent compared to last year despite the reduced number of store locations after 2020’s network rationalisation, starting 2021 with 668 fewer locations than at the start of 2020.

While COVID-19 limited store expansions, WCM was able to open 387 net new mini-stores in 2021, giving confidence in store expansion plans and revenue growth for 2022.

Meanwhile, MCH’s net revenue grew by 20 per cent year-on-year in 2021 and 32.3 year-on-year in the final quarter, respectively, to reach VND28.8 trillion and VND10.1 trillion.

A man orders drink at Phuc Long store. in January, Masan paid $110 million to acquire 31 per cent stake in this coffee and tea chain.

This year, the Crown X expects to deliver net revenue within the range of VND68 trillion and VND76 trillion, up 17 per cent to 31 per cent compared to 2021. Of which, WCM’s net revenue is expected to be within the range of VND38 and VND40 trillion, up 23 per cent to 29 per cent year-on-year, while MCH’s net revenue is expected to reach between VND34 and VND40 trillion, up 18 to 39 per cent versus 2021.

Masan MEATLife’s (MML) meat segment achieved VND4.5 trillion in net revenue in 2021, up 88.6 per cent compared to VND2.4 trillion in FY2020. Current capacity utilisation of pork processing plants is 20 per cent. At 26 per cent utilisation, the segment becomes profitable, which is expected to occur this year.

Branded pork expects to deliver net revenue between VND5 trillion and VND6.5 trillion, up 11 per cent to 45 per cent year-on-year (excluding feed segment).

Meanwhile, driven by strong demand and pricing for its products, Masan High-Tech Materials (MHT) delivered record net revenue of VND13.6 trillion in 2021, EBITDA of VND3.1 trillion, and NPAT Post-MI of VND196 billion. MHT’s results validate its decision to acquire H.C. Starck’s global tungsten business and efforts to become a mid-stream hi-tech chemicals player.

Masan High-Tech Materials (MHT) delivered record net revenue of VND13.6 trillion in 2021.

This year, MHT expects to deliver net revenue between VND14.5 and VND15 trillion, up 7 per cent to 11 per cent on the back of continued improvement to tungsten market fundamentals in 2022 and strength in commodity markets in general.

Regarding the company's new investments this year, Masan is planning to raise its stake in Phuc Long coffee and tea chains from the current 31 per cent acquired in January this year to 51 per cent. At a purchase price of $110 million in January, the implied equity valuation of Phuc Long was $355 million. In 2022, Phuc Long's revenue is expected to reach between VND2.5 and VND3 trillion. — VNS


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