- We increase our target price (TP) for MSN by 12% and maintain our BUY rating. 

- We maintain our view that MSN’s leading, wide-ranging consumer businesses should benefit from consumption growth in Vietnam over the long term. In 2023-26F, we forecast MSN’s EBIT CAGR of consumer-retail arms (i.e., combined EBIT of MCH, WCM, PL, and MML) to be 18%. Additionally, we expect MHT’s EBIT to recover from a loss of VND92bn (USD4mn) in 2023 to a profit of VND918bn (USD37mn) in 2024F and then grow at an EBIT CAGR of 7% in 2024F-26F as its blasting operation restarts this year.

- Our higher TP is driven by three factors. First, we increase MCH’s valuation by 10%, following its better-than-expected profitability and cash balance amid consumption headwinds in 2023. Secondly, we increase WCM’s valuation by 18% as we lower its discount rate by 1 ppt to 14% as we are more confident in WCM’s viability of generating sustainable operating profit to its parent from 2024. Finally, we adjust the net debt at Holdco at YE 2023 in our MSN’s SoTP valuation by -10%, mainly because we incorporate a forecasted proceed of VND1.1tn from TCB (20%-owned by MSN)’s annual cash dividend in 2024.

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