Company Quarterly Earnings Update – MCH VN – 2021 Q1

Published On - June 11, 2021

TIM COMPANY RESEARCH

Summary of the 2021 Q1 results of Masan Consumer Corp. (MCH VN)

Q1/2021 results: Highlights

  • MCH’s business continued a strong growth momentum, posting an impressive revenue growth of 16.0% y/y, with the main contribution came from seasoning (14% y/y) and non-alcoholic beverages (25% y/y), while convenience food declined by 6% y/y, due to a high base in Q1/2020. Processed meat and home care segments’ contribution to the total sale was still insignificant.
  • The bottom line, however, only increased by 7.9% y/y, due to higher OPEX (marketing expenses specifically) for new products.
  • Financial position remained healthy (D/E ratio of 0.50x, D/A ratio of 0.29x), while loans to MSN still at a a significant level of 34% of total assets, according to our estimates.
  • MCH is scheduled to payout its 2020 dividend (cash dividend of VND 4,500/share) in June, with the record date of June 2nd, and payout date of June 14th.

Outlook

  • MCH’s parent company Masan Group (HSX: MSN) recently hosted an analyst call, with key highlights include: integration plans with VinCommerce, future plans for MCH’s financial loan to MSN. We are interested in MCH’s potential further integration with VCM, especially its future plan to become the exclusive vendor for VCM’s private label products. There is no definite timeline for this yet, but we believe this will be a worth watching potential catalyst.
  • As for FY2021, we believe MCH’s organic growth will slow down, due to a high base of 2020, when Covid-19 and the flood in the central of Vietnam drove up demand for seasonings and convenience food dramatically. Numerically, we maintain our estimate revenue to increase by only 1.9% y/y, due to the high base, reaching VND23,793bn. MCH will maintain its current SG&A structure. Net profit should reach VND4,723n, +1.9% y/y, while its net margin will stay at 19.9%.
  • For the FY2022, we forecast MCH’s revenue and net profit to rise by 4.3% y/y and 3.7%, respectively, and the net margin will be unchanged.

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Featured image credit: masangroup.com