MSN – Growth Opportunities Are Still Ahead

Rating: BUY

Target price: VND120,800

Upside: 28%

Key event catalysts:

• MCH: benefits from healthier distribution network, improving product mix and partnership agreements
• MNS: approaching a complete 3F model
• MSR: enhances profits by going further downstream
• Proceeds from selling treasury stocks will lower leverage and financial expenses

 MCH should benefit from a healthier distribution network, improving product mix and partnership agreements. By improving the health of its distribution network, and new product launches of core portfolio, we believe MCH is well positioned for its upcoming campaigns. Besides, beverages will soon play a more important role, bolstering both the companywide sales and profits. Long-run benefits from the partnership agreement with Jinju Ham also makes the company more valuable.

MNS is approaching a completed 3F model (Feed-Farm-Food), helping to raise and stabilize profit margins. MNS is well prepared for taking share from the unbranded fresh meat market, which is a significant potential on the back of consumers increasingly shifting to modern retailers for safer products. Besides, we expect MNS’ animal feed category will see a strong rebound from Q4 2018, supported from high and stable pork prices.

MSR enhances profits by going further to downstream. We expect expanding APT capacity and producing other midstream products could both enhance margins and limit material price fluctuation risks. We also believe MSR can benefit in the long run with our positive outlook for tungsten prices.

Please access the link for our complete report: MSN_Company note_September_Final

Consumer Analyst: Quang Vo, quang.vo@yuanta.com.vn