·      In Q1 2023, Masan MEATLife JSC (UPCOM: MML) announced net sales of VND1,600 bn (+3.1% QoQ; +71.8% YoY). Revenue growth came from the effectiveness of the partnership with WCM and the consolidation of the processed meat segment into the business. Meanwhile, NPAT-MI continued to record negative growth for the fourth consecutive quarter at VND-168 bn (+1.2% QoQ; -168.9%YoY) due to a sharp increase in selling and interest expenses.

·      MML's gross margin may decrease as an increase in live hog prices will increase input costs. Meanwhile, MML is implementing a selling strategy to compete on price compared to traditional meat and has no plan to increase selling prices in 2023.

·      Based on the expectation that the economic recovery will lead to higher consumer spending on essential products such as meat, we believe that MML will complete its 2023 revenue and profit targets thanks to 1) consolidation of the processed meat segment; 2) the effectiveness of the competitive pricing strategy; and 3) the partnership strategy which boost sales on the WCM channel. Meanwhile, profits are expected to continue to record negative results, however, improve from 2022 thanks to economies of scale advantage.