Sunday, December 5 2021


Masan Group increases stake in The CrownX to 84.9%

Update: July, 01/2021 - 17:47


Vincommerce promotes online ordering and services that help customers buy their daily needs through app riders amid the pandemic. — Photo courtesy of Masan

HCM CITY — Masan Group (HOSE: MSN) and its subsidiary, The CrownX, on July 1 announced the acquisition of the latter’s shares from minority shareholders, increasing Masan’s direct and indirect stakes in it from 80.2 per cent to 84.9 per cent.

The Masan management believes the transaction represents optimal use of the company’s cash because of its trust in the growth and profit trajectory of The CrownX.

Danny Le, chief executive officer of Masan Group, said: “We will hit a key milestone this year with VinCommerce (VCM) becoming profitable. We are turning our focus on expansion to build the nation’s number one network while keeping our profit momentum intact.

“This turnaround gives us confidence to invest big to accelerate our offline-to-online strategy. We believe The CrownX is undervalued based on its expected 2021 financial performance and its current valuation does not price in the upside of our off-to-online platform.”

The CrownX is a consumer-retail platform that currently consolidates Masan’s interests in Masan Consumer Holdings and VCM.

With respect to VCM, based on achieving breakeven earnings before interest and tax for the month of June, management sees a path to deliver positive earnings in the second half of 2021, inclusive of headquarter costs.

VCM plans to expand its store network back to 3,000+. Its like-for-like growth posted in the first half of the year is supplemented by opening 300-500 VinMart+ (VMP) minimarts by year end.

The new stores are projected to deliver breakeven EBITDA in six to 12 months due to a revamped and more efficient supply chain model, total commercial margin uplift and a winning assortment to drive consumer traffic.

Besides the store-in-store Phúc Long Kiosk has and will drive traffic and profitability for VMP, with 50 pilot stores operational by the end of June 2021 expected to generate VNĐ5 million (US$216.6) additional sales per day in which VCM has a 20 per cent revenue sharing arrangement.

Management forecasts 1,100 kiosks will be operational across VMP locations by year-end.

The additional VNĐ1 million revenue per day (20 per cent of VNĐ5 million per day per kiosk) is expected to enhance EBITDA margins by 4 per cent for each VMP store that has a Phúc Long Kiosk.

Management expects to ramp up the online partnership with Lazada to drive grocery as a daily online use case.

The pilot of four-hour express delivery from 14 VinMart supermarkets in HCM City and Hà Nội with a winning portfolio of 2,000 pre-selected SKU’s, where fresh products acts as a differentiator, has delivered strong early results.

MCH posted double-digit top- and bottom-line growth in the first half of this year, despite an overall decline in the FMCG market in the period.

The growth continues to be driven by innovations launched over the past eight quarters and management preparing for big innovations as the FMCG market recovers in the second half of the year.     

Alibaba Group and Baring Private Equity Asia did not sell their shares as part of the transaction.

Management plans to raise a further US$300-400 million at The CrownX in the latter half of the year. — VNS




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