- We cut our target price (TP) for MSN by 15% but upgrade our rating from OUTPERFORM to BUY as the company’s share price has corrected by ~25% over the past three months.

- Our lower TP is driven by (1) decreasing our projection for WinCommerce’s (WCM) 2023F EBIT to a loss of VND271bn (USD12mn) from previously a net profit of VND68bn (USD3mn) due to its weaker-than-expected profitability in Q1 2023 and (2) cutting our project for TCB’s 2023F NPAT-MI by 8% (please refer to our banking team’s TCB Update Report, dated May 9, 2023). These factors are partly offset by rolling our TP horizon forward to mid-2024.

- For 2023, we maintain our expectation that weak consumption will overhang MSN’s consumer retail business and that higher financial expenses YoY will cause MSN’s 2023F earnings to decline. Nevertheless, as we expect more vibrant consumer spending and a more favorable economic backdrop in 2024F, we project MSN’s EBIT growth at 8%/24%/17% and the share from TCB’s NPAT growth at -8%/13%/26% in 2023F/24F/25F, respectively. Because the State Bank of Vietnam has cut policy rates by 100 bps so far in 2023, we expect MSN’s average cost of debt in 2024F to decline ~100 bps vs 2023F.

Powered by Froala Editor