Company Quarterly Earnings Update – MCH VN – 2021 9M

Summary of the 2021 9M results of Masan Consumer Corp. (MCH VN)

9M/2021 results: Highlights

  • Revenue increased 13.4% y/y to reach VND18,083bn. This growth rate is exceptionally strong, considering the high base of 9M/2020. MCH’s business has benefited from (1) increased demand driven by the stockpiling of foods and high convenience foods for studying & working from home due to a prolonged lockdown during the pandemic, (2) synergies achievement with WinCommerce systems (WCM), which was evident with 7.2% contribution of MCH’s sales through WCM network in 9M/2021 (up from 3.9% in 9M/2020).
  • Net profit increased 13.7% y/y to reach VND3,486bn. MCH’s gross margin improved from 41.8% to 42.2% thanks to (1) a higher contribution in total revenue of seasonings (33.6%) and convenient foods (33.1%), which have the largest gross margins, (2) processed meat’s gross margin improvement of est.160bps thanks to a robust revenue growth of 51.7% y/y.
  • Their financial position remained healthy (D/E ratio of 0.50x, D/A ratio of 0.28x). Loans to the parent company, MSN, remained high, amounting to VND6,259bn, accounting for 22.9% of total assets.

Outlook

  • For 2021: we revised our estimation for revenue up to VND25,977bn (+11.3% y/y) and net profit to VND4,801bn (+3.6% y/y) thanks to (1) an impressive performance of premium fish sauce and new granules, (2) high demand for convenience foods during the pandemic, and (3) a great brand awareness and high appreciation from the market for the processed meat segment.
  • From 2022: growth is being fueled by (1) integration with WinCommerce, (2) product innovation across segments, (3) a recovery in beverage and home & personal care (HPC) segments from the low base of 2021 due to COVID-19. On the other hand, the growth of seasonings and convenience foods will slow down in 2022 from the high base of 2021. As a result, we estimate revenue to reach VND27,975bn (+7.7% y/y) and net profit to hit VND4,935bn (+2.8% y/y).

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Featured image credit: masangroup.com