{"id":46274,"date":"2020-01-31T16:25:10","date_gmt":"2020-01-31T09:25:10","guid":{"rendered":"https:\/\/yuanta.com.vn\/?post_type=phan-tich&#038;p=46274"},"modified":"2020-01-31T16:36:00","modified_gmt":"2020-01-31T09:36:00","slug":"msn-fy19-results-worse-than-expectation","status":"publish","type":"phan-tich","link":"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/msn-fy19-results-worse-than-expectation","title":{"rendered":"MSN &#8212; FY19 results worse than expectation"},"content":{"rendered":"<p><strong>Hold-OPF<\/strong><\/p>\n<p><strong>Target price: VND 84,100<\/strong><\/p>\n<p><strong>Upside: 68%<\/strong><\/p>\n<p><strong><span style=\"font-size: 14pt\">Event:<\/span><\/strong><\/p>\n<p>Masan published its results prior to the Tet holiday. Revenues missed our forecast, but the bottom-line still beat our expectation.<\/p>\n<p><span style=\"font-size: 14pt\"><strong>Our take:\u00a0<\/strong><\/span><\/p>\n<p><strong>Masan Consumer (MCH) was the only subsidiary to post positive FY19 top-line growth (+8.6% YoY). <\/strong>This was slightly below our expectation of a 9.8% YoY increase. Management admitted that their innovations in seasonings and convenience foods in 2019 did not contribute as planned. For FY20, management expects to see 10%-15% YoY top-line growth, driven by beverages (double-digit growth), seasonings and convenience food premiumization, and the new business: home and personal care.<\/p>\n<p><strong>Masan MEATLife (MML) disappointed with a 1.3% YoY decline in sales, <\/strong>compared to our expectation of 5% growth. The key headwind, per management, was African Swine Fever, which dampened pig feed sales (accounting for 50% of total feed sales). As for FY20, management expects to see 20%+ growth with animal feed growing in the high-single to low-double digits. However, management says that fresh meat will be the main driver and should contribute 20%-25% of MML\u2019s revenues.\u00a0\u00a0 <strong>\u00a0<\/strong><\/p>\n<p><strong>Masan Resources (MSR) saw the worst subsidiary top-line performance with a 31.4% YoY decline, <\/strong>which is worse than our expectation of a 22.5% decline. Soft tungsten prices and difficulties in selling copper were the key reasons. For FY20, management expects 17%-27% YoY growth in sales, with the assumption of average tungsten prices increasing by 11% YoY.<\/p>\n<p><strong>Vin Commerce (VCM) M&amp;A deal: <\/strong>Management expects VCM to poste VND 45-48 tn in sales in 2020, with target EBITDA margin of -3% to breakeven. Investors can find more detail about management\u2019s plans for this new business in our <a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/wp-content\/uploads\/2020\/01\/MSN-Vincommerce_MA.pdf\">VCM deal: Conference call takeaways<\/a> report.<\/p>\n<p><strong>Core bottom-line increased by 12%, which is better than our expectation of 10%<\/strong>, mainly due to lower-than-expected selling expenses (17% or VND 863 bn lower than our forecast).<\/p>\n<p><strong>Our view: <\/strong>Given the significant changes in MSN\u2019s corporate structure, our FY20 forecast is under review. In general, we believe that MSN\u2019s post-merger net profit will be reduced by two factors: (1) pre-tax losses from VCM and reduced profit from its core consumer business due to MSN\u2019s lower ownership in the business.<\/p>\n<p><strong>\u00a0<\/strong><\/p>\n<p><strong>Please access the link for our complete report: <a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/wp-content\/uploads\/2020\/01\/MSN-FY19-Results.pdf\">MSN FY19 Results<\/a><\/strong><\/p>\n<p><em>Analyst: Quang Vo,\u00a0<\/em><a href=\"mailto:quang.vo@yuanta.com.vn\"><em>quang.vo@yuanta.com.vn<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hold-OPF Target price: VND 84,100 Upside: 68% Event: Masan published its results prior to the Tet holiday. Revenues missed our forecast, but the bottom-line still beat our expectation. Our take:\u00a0 Masan Consumer (MCH) was the only subsidiary to post positive FY19 top-line growth (+8.6% YoY). This was slightly below our expectation of a 9.8% YoY&#8230;<\/p>\n","protected":false},"author":10,"featured_media":0,"template":"","class_list":["post-46274","phan-tich","type-phan-tich","status-publish","hentry","analysis-category-company-update","analysis-category-conglomerates","analysis-category-consumer-staples"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.3 (Yoast SEO v23.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>MSN -- FY19 results worse than expectation | Yuanta Vietnam<\/title>\n<meta name=\"description\" content=\"Hold-OPF Target price: VND 84,100 Upside: 68% Event: Masan published its results prior to the Tet holiday. 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