Company Quarterly Earnings Update – MCH VN – 2018 Q3

Summary of the 9M 2018 results of Masan Consumer Corp. (MCH VN) 

9M/2018 results: highlights
  • Revenue increased strongly by 32.6% yoy. The growth drivers were: 1) the low base in 2017 due to the destocking initiative; 2) the increased contribution from high-value products; 3) the extended distribution of the energy drink Wakeup 247, which MCH now sells nationwide; 4) new products such as the energy drink Compact, the mineral water Vivant, and the mashed potato Omachi.
  • Net profit surged by 91% yoy thanks to strong revenue growth, the improved use of economies of scale and substantially lower commissions to distributors as a result of the shift from the PUSH to the PULL sales strategy.
  • MCH’s financial position was reasonably sound: at the end of Q3, 18% of total assets were liquid, and the leverage was moderate (D/E and D/A of 0.36x and of 0.21x respectively). Net receivables from the parent group increasing only slightly from the end of Q2, but still making up 33% of total assets.
Outlook
  • We continue to be confident that MCH will grow faster than the dynamic and innovative Fast – Moving – Consumer Goods (FMCG) sector (according to Kantar World Panel, this sector should grow by 5% in 2018 and also by 5% during the next 5 years). Constant innovation and product development, a sound marketing strategy and an excellent distribution network are MCH’s main growth drivers. Having said that, the exceptional growth of 9M/2018 is unlikely to be repeated as the company’s results will start to normalize from the favorable base effect of 2017.
  • We expect net profit to reach VND 3,227 bn (+43.7% yoy) in 2018 and VND 3,544 bn (+9.8% yoy) in 2019.
Recommendation

Company ratings and target prices are accessible for clients only.

If you are interested in getting full access to our paid Primary Research Materials feel free to get in touch with us at your convenience.

Our team is actively covering 50 companies in the listed Vietnamese equity space for our clients.


Featured image credit: masangroup.com