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April 24, 2023

Consumer of Things: Masan sets a revenue target of VND100 trillion in 2023

HCMC, 24 Apr 2023 – Today, Masan Group Corporation (HOSE: MSN, “Masan” or the “Company”) and two of its key publicly listed subsidiaries (Masan Consumer (HNX-UPCoM: MCH) and Masan MEATLife (HNX-UPCoM: MML) jointly held their 2023 annual general meeting (AGM) in HCMC under a shared theme, “Consumer of Things”.

The jointly held AGMs gave stakeholders of each of the listed companies an opportunity to fully appreciate the unique Consumer-Retail-Tech ecosystem Masan is building to improve productivity throughout the consumer value chain and better serve Vietnamese consumers and their evolving needs.
Speaking at the meeting, Mr. Nguyen Dang Quang, Chairman of the Board of Directors of Masan Group shared: “In 2022, Masan has changed its mindsets about both what we are doing and how we position ourselves. It's about being a service, experience, and customer insightful company."
Danny Le, General Director of Masan Group, added: “We will develop an Omni-channel platform for consumer insights, products, services and experiences to serve the needs of consumer".
He pointed out that Masan’ growth model requires first growing its physical store network, leveraging its offline touchpoints to digitalize and draw consumers “online”, and expanding its portfolio of products & services to increase use cases and drive higher traffic. In other words, the Company’s strategic growth engines are Network growth; Member growth; Wallet share growth. These three growth engines are empowered by two strategic multipliers of a nationwide fulfillment and logistics platform ("The Supra”, a subsidiary) to deliver goods to consumers anywhere and anytime in the most timely and cost-efficient manner and Artificial Intelligence (“AI”) and Technology to make Masan’s operations smarter and more automated at scale.

Masan has achieved multiple milestones in 2022 and continued to focus on accelerating growth engines:

(1) Network growth: Masan expanded its modern trade (“MT”) offline grocery network with 2 new locations per day in 2022 while its major competitors closed ~1,000 stores combined. As a result, Masan’s market share of minimart & convenience store (“CVS”) locations increased fr om ~40% in 2021 to ~50% in 2022.
(2) Wallet share growth: In 2022, Masan developed a breakthrough modern retail model, WIN store, to accelerate network and expand the wallet share. WIN stores provide groceries, health & well-being, financial services, altogether scale up the consumers’ wallet share fr om 25% to 68%.
(3) Member growth: The WIN membership program allows Masan to establish a direct connection with its members whether they are at the store or not. Besides, the customer acquisition costs are much lower than other platforms in the market. This is the essence of Masan's online-to-offline model - digitizing to serve consumers at offline locations with lower customer acquisition costs and no additional promotional costs.

Clear growth roadmap of Masan from 2023 to 2025 remains firmly in place with continued focus on the company's three core growth engines:

- Network Growth: Win MT & Partner with GT to serve 30 – 50 million WIN members.
- Member Growth: Scale up WIN membership at both offline and online network to 30 – 50 million WIN members.
- Wallet Share Growth: Expand and deepen more use cases beyond basic needs. Masan aims to provide financial services for 5 million new bank customers in the next few years.
The fulfillment and logistics services - The Supra, AI & Technology will empower the company’ growth engines. In 2023, Masan will launch Winnie, the AI – Smart PoS and AI-enhanced Demand & Supply planning.
Ms. Nguyen Thi Phuong, CEO of WinCommerce provided a roadmap for scaling up WinCommerce’s the grocery retailer network:
To win both urban and rural consumers, WinCommerce has developed a multi-format store portfolio to serve diverse consumer segments from mass-to-mass affluents, from urban to rural geographies, and from everyday shopping needs to family lifestyle destination. Customer experience will be a key differentiator for WinCommerce and the company is revamping its supermarket and minimarket portfolio by working with Paris-based store designer specialist Malherbe.
WinCommerce has simplified, digitized and automated its operational systems to prepare for the scaling up of its network to 10,000 stores.
At the event, Mr. Truong Cong Thang, CEO of Masan Consumer presented on Masan’s vision of building power brands and products:
Redefine scope of 3 brands to go global: Chin-su, Omachi and Vinacafe. By 2027, global business will contribute 15% of Masan Consumer Holdings’ revenue. Masan has recently launched a collection of Seasonings products under Chin-su brand at Japan Foodex in March. The collection will be distributed in both domestic and international markets.
Relaunch a new generation of R&D Center complying to the standards in South Korea and Taiwan. Masan will develop products with i) global/regional health and safety standards; ii) world-class packaging; iii) the best technology/know-how for each category; and iv) superior taste and flavor.
Transform the way Masan understands consumers and builds brands. The Company will build 5 Consumer Innovation Centers across Vietnam to better understand consumer to develop product and communication. Additionally, Masan will skew 50% of marketing budget to digital by the end of 2023 and restructure the organization to unleash full potential of each category.
Adapt sales efforts to the different consumer behavior in urban areas and the rising share of modern trade and e-commerce. Management expects to increase shares of sales from Modern Trade (MT), Urban, and E-commerce from 40% to 60% by the end of 2025. At the same time, Masan will introduce new channels to approach consumers who shop via general trade channels (“GT”).
To expand the network and increase member benefits, the Company plans to cooperate with many well-known domestic and foreign partners. At the event, Company announced a co-membership program with Lazada wh ere consumers can enjoy an O2O (Online to Offline) experience with complementary products & services from daily grocery needs from WinCommerce to consumer electronics, fashion & beauty from Lazada. The co-membership program is expected to launch in June 2023.
For the 2023 financial budget proposed to shareholders, Masan expects consolidated net revenue to be between VND90,000 billion and VND100,000 billion, which presents a growth of 18% and 31%, respectively, compared to VND76,189 billion in 2022. TCX is still expected to be the key driver for revenue growth with more than 70% contribution to 2023 net revenue. Core NPAT Pre-MI (excluding one-off) is expected to be within the range of VND4,000 billion and VND5,000 billion, achieving a growth rate between 4% to 30% compared to VND3,852 billion in 2022. In the downside scenario wh ere macro conditions are tougher than expected and negative consumer sentiment persists, management projects top line to grow between 10% and 15%.
TCX: Masan’s consumer-retail subsidiary that consolidates MCH and WCM expects to deliver net revenue within the range of VND65,000 billion to VND72,300 billion, up 16% to 29% compared to 2022.
  • WCM is expected to deliver net revenue within the range of VND36,000 billion and VND40,500 billion in 2023, up 23% to 38% YoY. Key drivers of this growth are continued successful new store openings and store level revenue uplift.
  • Net revenue of Masan Consumer Holdings, the subsidiary that consolidates Masan Consumer and Masan Brewery, is expected to reach VND30,500 billion and VND33,500 billion in 2023 by focusing on R&D efforts, up 15% to 30% compared to previous year. In the long term, Masan’s branded consumer business targets revenue of VND50 trillion with 20% operating profit margin by 2025 and VND80 – 100 trillion by 2027
Phuc Long Heritage (“PLH”) is expected to deliver VND2,500 billion to VND3,000 billion, a solid growth of 58% to 90% compared to 2022 driven by successful opening of 75 to 90 flagship stores and maintaining new store revenue performance as existing stores and improving new store revenue performance to match existing stores. PLH will also begin loyalty integration into Masan’s WIN Membership program, giving WIN members more benefits when frequenting PHL’s locations, which is expected to boost traffic.
Masan MEATLife (“MML”) projects to deliver net revenue within VND8,500 billion and VND9,000 billion, up 78% to 88% YoY driven by expanded pork and chicken product portfolio, especially in processed meat, and increased distribution via WCM channels (reduced price gap to wet market by WIN membership would induce trial and convert consumer from general trade to modern trade).
Masan High-tech Materials (“MHT”) is expected to deliver net revenue of VND16,500 billion to VND18,200 billion, an increase by 6% to 17% compared to previous period. Key initiatives would be to focus on cost optimization, integration with Nyobolt, and ongoing preparation for tungsten scrap and black-mass recycling. MHT will continue to explore international and domestic options to sell copper inventory.
Balance sheet: Masan will continue to actively explore alternatives in the capital market to extend its debt maturities, improve interest rates, and unlock earnings via deleveraging.
Masan's vision has stood for many years, driving productivity across the consumer value chain, building a financial gateway for the people. By now, Masan has the platform to realize this vision.


MASAN GROUP CORPORATION
Masan Group Corporation (“Masan” or the “Company”) believes in doing well by doing good. The Company’s mission is to provide better products and services to the 100 million people of Vietnam, so that they can pay less for their daily basic needs. Masan aims to achieve this by driving productivity with technological innovations, trusted brands, and focusing on fewer but bigger opportunities that impact the most lives.
Masan Group’s member companies and associates are industry leaders in branded food and beverages, branded meat, modern retail, value-add chemical processing, and financial services, altogether representing segments of Vietnam’s economy that are experiencing the most transformational growth.

CONTACTS:
Investors/Analysts
Phu Duong
T: +84 28 6256 3862
E: [email protected]

Media
Pham Van
T: +84 28 6256 3862
E: [email protected]


This press release contains forward-looking statements regarding Masan’s expectations, intentions or strategies that may involve risks and uncertainties. These forward-looking statements, including Masan’s expectations, involve known and unknown risks, uncertainties and other factors, some of which are beyond Masan’s control, which may cause Masan’s actual results of operations, financial condition, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. You should not rely upon forward-looking statements as predictions, future events or promises of future performance.

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