Masan Group’s profit soars in 2021

Hanoi (VNA) - Masan (stock code: MSN) expects its consolidated net revenue to reach between 90 trillion VND and 110 trillion VND (3.9 billion USD and 4.7 billion USD) in 2022, representing a growth of 22 percent and 36 percent compared to 2021’s result of 74.2 trillion VND.

According to its detailed analysis on its unaudited management accounts for the fourth quarter and financial year 2021 on Wednesday, revenue contribution from consumer businesses (excluding feed and Masan High-Tech Materials) was 68 percent in 2021 and is projected to improve to 85 percent in 2022.

Core NPAT Pre-MI (excluding one-time gains/losses and feed segment) is expected to be within the range of 5 trillion VND and 7 trillion VND, an increase of 32 percent to 84 percent compared to 3.8 trillion VND in 2021.

In 2021, Masan reported consolidated net revenue of 88.6 trillion VND, a rise of 14.8 percent year-on-year. Net revenue in the last quarter rose 10 per year to 23.8 trillion VND.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 58.1 percent year-on-year to nearly 16.4 trillion VND, primarily driven by the CrownX (TCX) increasing EBITDA by 72.9 percent.

Reported core net profit after tax post-minority interest (NPAT Post-MI) grew by 593.9 percent to 8.6 billion VND compared to 1.23 trillion VND in 2020.

“We have solidified our offline mini-mall concept and are ready to expand nationwide, but the next wave is to transform The CrownX into a consumer-tech platform. 2022 will be the year we digitalise our platform into an integrated system from manufacturing, logistics, distribution all the way up to 100 million consumers,” said chairman Nguyen Dang Quang.

Quang said this will drive 10 percent operational cost efficiencies and, most importantly, combine the company’s traditional consumer insights with AI and machine learning insights to better serve consumers products and services they truly desire.

“By doing so, we envision a consumer-tech platform that accelerates our growth potential and delivers strong profits,” he said.

Despite COVID-19 adversely impacting store expansion, innovation launches and supply chain/production operations pushed net revenue of the CrownX (TCX), Masan’s integrated consumer-retail platform that consolidates WinCommerce (WCM) and Masan Consumer Holdings (MCH) up 6.9 percent last year to reach 58 trillion VND, the report said.

Net revenue was up 12.6 percent in the last quarter, signalling growth momentum heading into 2022.

Separately, WCM delivered 30.9 trillion VND in net revenue last year, down 0.3 percent compared to last year despite the reduced number of store locations after 2020’s network rationalisation, starting 2021 with 668 fewer locations than at the start of 2020. 

While COVID-19 limited store expansions, WCM was able to open 387 net new mini-stores in 2021, giving confidence in store expansion plans and revenue growth for 2022.

Meanwhile, MCH’s net revenue grew by 20 percent year-on-year in 2021 and 32.3 year-on-year in the final quarter, respectively, to reach 28.8 trillion VND and 10.1 trillion VND.

This year, the Crown X expects to deliver net revenue within the range of 68 trillion VND and 76 trillion VND, up 17 percent to 31 percent compared to 2021. Of which, WCM’s net revenue is expected to be within the range of 38 trillion VND and 40 trillion VND, up 23 percent to 29 percent year-on-year, while MCH’s net revenue is expected to reach between 34 trillion VND and 40 trillion VND, up 18 to 39 percent versus 2021.

Masan MEATLife’s (MML) meat segment achieved 4.5 trillion VND in net revenue in 2021, up 88.6 percent compared to 2.4 trillion VND in FY2020. Current capacity utilisation of pork processing plants is 20 percent. At 26 percent utilisation, the segment becomes profitable, which is expected to occur this year.

Branded pork expects to deliver net revenue between 5 trillion VND and 6.5 trillion VND, up 11 percent to 45 percent year-on-year (excluding feed segment).

Meanwhile, driven by strong demand and pricing for its products, Masan High-Tech Materials (MHT) delivered record net revenue of 13.6 trillion VND in 2021, EBITDA of 3.1 trillion VND, and NPAT Post-MI of 196 billion VND. MHT’s results validate its decision to acquire H.C. Starck’s global tungsten business and efforts to become a mid-stream hi-tech chemicals player.

This year, MHT expects to deliver net revenue between 14.5 trillion VND and 15 trillion VND, up 7 percent to 11 percent on the back of continued improvement to tungsten market fundamentals in 2022 and strength in commodity markets in general.

Regarding the company's new investments this year, Masan is planning to raise its stake in Phuc Long coffee and tea chains from the current 31 percent acquired in January this year to 51 percent. At a purchase price of 110 million USD in January, the implied equity valuation of Phuc Long was 355 million USD. In 2022, Phuc Long's revenue is expected to reach between 2.5 trillion VND and 3 trillion VND./.