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MSN - A silver lining is emerging from policies optimizing the business model

Q1-FY25: MSN showed strong profit growth, driven by optimizing its business model to meet Phase-2 objectives in its ecosystem transformation. This phase seeks to expand the network, increase market share, and enhance profitability divisions.
• MSN posted flat net revenue YoY in Q1-FY25 at VND 18,897 bn (USD 750mn). While NPAT-MI surged 277% YoY to VND 394 bn (USD 16mn), driven by a strategic shift towards profitability in previously loss-making segments like WinCommerce (WCM; MSN holds an 85.4% stake), Masan MeatLife’s chilled meat division (MML; 94.3% stake), and High-Tech Materials (MSR; 94.9% stake).
• Despite strong YoY profit growth, MSN achieved only 13% of our FY25 forecast by Q12025, mainly due to underperformed results from Masan Consumer (MCH; 66.0% stake) and Techcombank (TCB; 19.9% stake).
FY25 Outlook: Anticipated recovery of the Consumer staples/Grocery market and Techcombank performance by year-end.
• The consumer staples goods and grocery sector typically sees a seasonal uplift in purchasing power at the end of the year, which supports performance across MCH, MML, and WCM. We expect MSN’s consumer divisions to stay on track with their growth strategies: MCH is accelerating new SKU launches under Omachi, Kokomi, and Wakeup247 brands to boost market share; MML is focusing on high profit margin segments and benefiting from higher pork prices; and WCM maintaining store fixed costs at an optimal level, MSN aims to enhance profit margins by boosting revenue per store.
• We project MSN to deliver net revenue of VND 83,285 bn (USD 3,305 mn; flat YoY). NPAT/EPS is expected to rise 62% YoY to VND 3,245 bn (USD 129 mn) and VND 2,145, respectively.
Outlook and recommendation
In the long term, MSN will advance its Phase 2 strategy (2025–30F), aiming to scale its network, market share, and profitability through deep digitalization and automation. Key initiatives include: (1) Expanding market for core MCH brands (Nam Ngu, Chinsu, Omachi, Kokomi, and Wakeup 247) and accelerating the growth of WinCommerce (WCM) retail network. (2) Gradually improving profit margins, especially across newer segments (which recorded losses in previous years), towards the Asian industry average (WCM, MML, MSR, and PLH). This is driven by cost optimization, a focus on high profit margin SKUs, and cross-platform synergies within the ecosystem, based on 3 strategic pillars: Network, Share of Spending, and Developed Membership from 2020 to 2024.
We use a Sum-of-the-Parts (SoTP) approach to capture the growth and risk across MSN’s diverse businesses. Target price is VND 74,500 per share (USD 3.0 ; VND 25,200/USD), implying a 2025 forward P/E of 34.7x. Based on the closing price as of 06/06/2025, we rate MSN as ACCUMULATE.