Summary of the 2021 results of Masan Consumer Corp. (MCH VN)
2021 results: Highlights
- A 19.0% increase in revenue was primarily driven by (1) a strong convenience foods demand during the lockdown and social distancing period and (2) synergies with WinCommerce systems (WCM) as evident by sales of MCH products through the WCM network, accounting for 6.2% of total revenue (vs 4.1% in 2020). The two largest revenue contributors remained Seasonings (34.9%) and Convenience Foods (31.7%), which grew by 19.0% and 27.0% respectively.
- A flat gross margin of 42.5% is due to higher margins in seasonings and processed meat sectors being offset by lower margins in convenience foods and the Home Personal Care sectors. Overall, net profit jumped 20.4% y/y to VND5,442bn.
- MCH’s financial position remained healthy (D/E ratio of 0.52x, D/A ratio of 0.28x), despite loans to the parent company (MSN) are still high at 21.6% of total assets.
- For 2022: A single-digit growth rate of net revenue and net profit is expected after the high base of 2021. We forecast revenue to reach VND29,537bn (+6.3% y/y) and net profit to hit VND5,513bn (+1.3% y/y). This growth is fueled by (1) integration with WCM’s strong expansion, (2) product innovation and a premiumization strategy across product categories, (3) a higher market share in instant noodles. However, due to the reopening of restaurants and considering 2021’s high base, the growth of seasonings and convenience foods will return to normal in 2022.
- For 2023: net revenue continues remain in the single-digit growth at 6.5% y/y, which is VND31,456bn. The bottom line is predicted to increase by 9.9% y/y to VND6,059bn. Key drivers are: (1) the gross margin is expected to recover to 42.3% due to a cool down of input material prices when tensions between Russia and Ukraine ease, (2) greater profitability due to a larger market share in convenience foods and granules, as well as a premiumization strategy in sectors like instant noodles (upgrading Omachi premium to super premium) and Home Personal Care/HPC (set to penetrate the upper mainstream and premium segments).
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