Định giá công ty MASAN

2022
PREPARED BY
Group 5

MASAN GROUP
VALUATION
PRESENTED TO
Mrs. To Thi Thanh Truc

K194040540 - K194040542 - K194040555 - K194040556


ABOUT COMPANY

MISSION
To provide quality products and
services for Vietnam’s population of
nearly 100 million people, enabling
them to get more value for money on
their daily basic needs.

VISION
To become a large corporation in the
local private sector in Vietnam in
terms

of

scale,

profitability

and

shareholder income, and a potential
growth

partner

and

preferred

employer. in Vietnam

VALUES
- Talent and creativity
- Leadership qualities
- The spirit of mastering the work.
- Integrity and transparency

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BUSINESS DESCRIPTION AND STOCK PERFORMANCE

GROUP 5

BUSINESS DESCRIPTION AND
STOCK PERFORMANCE
INTRODUCTION

Masan Group (Masan Group Joint Stock Company) is one of Vietnam's largest
private-sector companies. This is one of the most important business groups
in Vietnam's private sector. Masan Group's primary business focus is on
consumer goods and resources in Vietnam. Masan has grown steadily over
the years with the goal of becoming Vietnam's largest business group.

HISTORY

PRODUCTS

Masan Group Joint Stock Company, formerly known

Masan Consumer Holdings

as Ma San Maritime Joint Stock Company, was founded

(MCH)

in November 2004. In August 2009, the company

Masan MEAT Life (MML)

changed its name to Ma San Group Joint Stock Company
(Masan Group Corporation) and was successfully listed
on the Ho Chi Minh City Stock Exchange. On November
5, 2009, in Ho Chi Minh City. In July 2015, the company
officially changed its name to Masan Group Joint Stock

Vincommerce (VCM)
Masan Resources Company

(MHT)
Techcombank (TCB)

Company. Despite the fact that the company was
officially

established

in

2004,

it

was

already

in

operation. Masan Group has been in operation since
1996

as

a

result

of

the

actions

of

our

major

shareholders, subsidiaries, and predecessors.
Masan Group is the parent company, with a
controlling economic interest in The CrownX, Masan
MEATLife ("MML"), and Masan High-Tech Materials
("MSR"), with 84.93 percent, 78.74 percent, and 86.39
percent, respectively, as of June 30, 2021. The CrownX is
a retail consumer platform that combines Masan
Consumer Holdings' and VCM Service and Trade
Development Joint Stock Company's interests. As of
June 30, 2021, Masan Group's consolidated ownership
ratio in Techcombank's charter capital is 20%.

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BUSINESS DESCRIPTION AND STOCK PERFORMANCE

GROUP 5

FINANCIAL SCORECARD

CAPITAL HISTORY

COMPETITIONS
Viet Nam Dairy Products Joint Stock Company
Vinamilk (VNM)
TuongAn Vegetable Oil joint stock company
(TAC)
KIDO Group (KDC)
Dabaco Group (DBC)
Vinh Hoan Corporation (VHC)
Thanh Thanh Cong - Bien Hoa Joint Stock.
Company (SBT)
Nam Viet Corporation (NAVICO)

MARKET SHARE
Masan has maintained its position in the Top Best
Listed Companies in Vietnam for 9 consecutive
years, establishing itself as a leading and typical
private economic group in Vietnam through
appropriate

development

and

turnaround

strategies. responsive and timely Today, Masan is

the market leader in prestigious food products,
demonstrating

that

the

company

has

the

strongest financial strength in the market. Masan
Consumer's products have currently captured the
following market share.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

GROUP 5

FINANCIAL POSITION AND
BUSINESS PERFORMANCE
ASSETS
2017

Total assets fell sharply from 73.039,038 billion to 63.529 billion (-13.02

percent) as a result of significant impacts, including reduced investment in
associates as a result of Techcombank selling convertible bonds.

2018

Total assets began to increase again, increasing 1.65% to 64.578.613 as a
result of effective investment in long-term financial investments.

2019 Total assets nearly doubled compared to 2018, so volatility increased rapidly,
reaching 50.66 percent, indicating the company's positive development.
2020 The company's assets increased by 18,95 percent year on year, reaching VND
115.736.562 billion at the end of 2019. Short-term and long-term assets
increased year after year, from 22.876.206 in 2016 to 29.760.685 in 2020 and
50.162.832 in 2016 to 85.975.877 in 2020, respectively. Simultaneously, fixed
assets increased to 49.582.187, nearly doubling from 2015.

LIABILITIES
2017

Total liabilities fell (-17,87 percent) as a result of negative volatility, and
total long-term debt fell.

2018

Due to a decrease in total long-term debt, total liabilities decreased
sharply in 2018, reaching -29.56 percent compared to 2016.

2019

Total liabilities have a tendency to rise quickly. In more detail, a 48.88

percent increase is 45.408.844 in 2019, nearly half of what it was in
2018.

2020

Total liabilities had more than doubled by the end of 2020 compared
to 2019, with long-term liabilities increasing by 247.07 percent to
51.831.620 and short-term liabilities increasing by 38.874.663. (27,49
percent ). The reason for the increase is that liabilities nearly doubled
to 90.706 billion, owing primarily to an increase in financial loans,

OWNER'S EQUITY

secured and unsecured bonds.

2017 There was a slight increase, but the equity remained at -0.43%. With the
continued purchase of treasury shares, Masan also issued more, so the
equity increased compared to 2016.

2018 There was a significant fluctuation of 68.50 percent in 2018.
2019 Although there was a slight decrease compared to 2018, there was still a
positive growth of 52.26 percent. This is due to a significant increase in
volatility caused by the equity premium and retained earnings.

2020 Masan has increased its equity by issuing more shares and operating
profitably. Masan Group's equity decreased by 51.7 percent (VND 26.858

billion) as of December 31, 2020, to VND 25.030 billion. When the numbers
are broken down, it is clear that Masan Group's equity dropped dramatically
as a result of the company's negative undistributed profit after tax of VND

25.201 billion. Masan Group purchased 14,8 percent of The CrownX JSC from
a third party in June and August 2020 for a total of nearly 23.692.2 billion
VND. Masan Group's economic stake in CrownX increased from 70% to
84.8% following the acquisition. However, with only VND 1.672 billion in
recorded assets, the company made a negative after-tax profit of VND
22.020 billion.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

GROUP 5

FINANCIAL POSITION AND
BUSINESS PERFORMANCE
NET SALES AND NET INCOME

2017

The company's revenue exceeded VND 37.621 billion, while profit was 3.607.690 billion lower
(down 13.1% from the previous year) and income was 3.607.690, down 4.37 percent from the
previous year. Masan Consumer Holdings increased its revenue and profit by shifting its
business model from "selling goods" to "building brands." The revenue from MCH's goods is
gradually stabilizing in the second half of 2017, while the products that are the pillars of growth
remain viable. Meanwhile, Masan Nutri-Science (MSN) was the primary driver of value decline in
2017. In 2017, revenue increased by 23.5% to VND 18.690 billion.

2018

Masan Group's net revenue was VND 38.187.617 billion, up 1.51% from 2017. (VND 37.620.646
billion). The spice business, premium convenience foods, and processed meats generate the
majority of Masan's revenue. Furthermore, Masan Nutri-Science successfully launched the
chilled meat brand "Meat Deli," laying the groundwork for Masan Nutri-Science to gradually
transform into a fast-moving consumer goods (FMCG) enterprise. Moreover, Masan recorded 1
times the amount of VND 1.472 billion affected by the issuance of treasury shares of
Techcombank affiliates with a higher over-prescribed value than Masan recorded.

2019

The growth rate did not fluctuate much, remaining at 13,22%, and revenue did not change
significantly, with the growth rate decreasing -2,18%. Although it fell slightly from the previous
year, it had many bright spots, particularly in the final months of the year. In particular, thanks
to the product premium strategy and the growth of the furniture industry, Masan Consumer
Holdings (MCH) increased revenue by 15% over the same period in 2018 and 20% over the third
quarter of 2019. In December, MEAT's revenue reached VND 100 billion, a significant milestone
only one year after the school's inception.

2020

Masan Group's revenue was VND 77.218 billion, an increase of 106.7 percent over revenue in
2019. VinCommerce, which operates the Vinmart supermarket chain, made a VND 16 billion
profit and achieved positive EBITDA for the first time. The impressive revenue of Masan Group
is due to the acceleration of the meat and consumer goods businesses, as well as the
consolidation of newly merged businesses. Masan is the largest shareholder in Techcombank.
Because of the consumer-centric strategy, 15 percent shares generated a profit after tax of up
to VND 15.800 billion in 2019, up from VND 12.838 billion in 2019.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

GROUP 5

FINANCIAL POSITION AND
BUSINESS PERFORMANCE
IMPORTANT INDICATORS
LIQUIDTY RATIOS

According to the data, the company's current ratio was at
its highest in 2016, at 1.28 times, and its lowest in 2020,
and it has been trending down since 2017, remaining
around 0.8 in the 2018-2020 timeframe.
There has been a significant drop since 2017 as a result of
an increase in short-term debt and a decrease in shortterm assets. Although the current ratio varies over time, a
current ratio of less than one indicates that MSN is having
difficulty repaying short-term debt in all four years from
2017 to 2020.
The quick ratio peaked in 2016, and then fell for the next
four years. MSN's quick solvency in all five periods less
than one demonstrates the company's inability to pay off
all short-term loans immediately.

DEBT MANAGEMENT RATIOS
Due to higher profit and cash flow growth, MSN resolves
acquired debt payments from 2016 to 2019. A significant
drop in earnings in 2020 has had a significant impact on the
company's financial performance.
The TIE index has fallen from 3,22 in 2019 to 0.32 in 2020.

Whereas the D/E ratio gradually declined from 2016 to 2019,
reaching around 0.06 (2019), it has risen rapidly to 2,48 in
2020.
Masan's Debt to Equity ratio has always been very high in
comparison to the industry average, owing to the fact that
the company has expanded beyond the foodservice industry
and into other industries, possibly including banking
(Techcombank), commerce, and others (VinMart).

EFFICIENCY RATIOS

Total asset and inventory turnover increased slightly in
2018, but decreased 1.5 times in 2019.
The average collection period has increased dramatically
from 5 (2016) to 14 (2020), indicating that the company has
been losing more time recovering payments in recent
years.
In comparison to previous years, MSN's asset management
situation in 2019 is poor.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

PROFITABILITY RATIOS

GROUP 5

The ROA and ROE indices fluctuated in different ways over

time.
The ROA Index rose significantly in 2018 (8,7%), fell
significantly in 2019 and 2020, reaching the lowest level of
1,21%, but remained relatively high when compared to the
industry average of 5,46%. (period of 5 years 2016 to 2020).
The ROE index has steadily declined over the years,
peaking at 15,27 percent in 2016 and falling to a low of
5,58 percent in 2020, which is lower than the average index
of -11,88 percent in 2020. However, over a five-year period,
the average ROE remains higher than the industry
average.
The profit margin index performed admirably over the four
years from 2016 to 2019, but it fell significantly to only 1.81
percent in 2020 after peaking at around 17 percent in
2019. This is due to the effects of selling expenses, which
increased more than threefold from around 4.000 trillion
VND in 2019 to more than 13.000 trillion VND in 2020.

MARKET VALUE RATIOS
The price per share has remained constant over the
last four years, but earnings per share have dropped
by 4,5 times, from 0,0054 in 2019 to 0,0012 in 2020. At
the same time, book value per share in 2020 will be two
times lower than in 2019.
Due to the low earnings per share in 2020, the P/E ratio
was quite high (8,42), indicating a positive future
performance, and investors have higher expectations
for future earnings growth and are willing to pay more
for them.

DUPONT EQUATION

In 2020, the return on common equity was 5,58
percent, a decrease of 9,69 percent over the
previous four years.
In one year, from 2019 to 2019, the return on
common equity fell from 12.4% to 5.58%. The
reason for this is a drop in profit margins, which fell
from 17.04 percent to 1.81 percent in one year.
Sales and net income are two factors that will have
a significant impact on profit margins in 2020. Sales
in 2020 increased three times over sales in 2019,
but net income in 2020 was only 1.395.013, 4.5
times less than net income in 2019. This was due to
a significant increase in selling expenses in 2020.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

GROUP 5

BUSINESS RISK
GENERAL RISK
Risks of Covid-19 epidemic: Not only difficulties in the production stage, as the
company owns the largest retail chain in the country, Masan also faces difficulties
in this industry. Transporting goods, moving between epidemic areas. The
turnover rate is quite high because employees are worried about working in a
dangerous environment (sales, delivery, warehousing, etc.). There is a shortage of

personnel because many cases have to go into isolation under the guidance of
health authorities. The increased medical costs such as disinfection, testing,
specific labor tools during the epidemic season... The entire system across the
country strictly applies 5K anti-epidemic standards. Although the production and
supply of goods face many challenges, Masan has been performing well the core
mission of the business: providing essential goods with stable prices to serve
consumers. Masan Group is currently a rare Vietnamese enterprise capable of
integrating the entire production and retail chain of essential goods.
Risk of business brand: Brand recognition is important to attract new consumers
and maintain existing consumer loyalty to Masan Food products. Inability to
protect intellectual property rights or disputes Masan Food's intellectual property
rights with another company could have a material impact on the company's
business, financial position, results of operations and future prospects.
Risks on business strategy:
+ The Company implements its business expansion strategy through expanding
the market share of its subsidiaries. Specifically, Masan Food expands its market
share in current products (fish sauce, soy sauce, chili sauce, instant noodles) and
new products through advertising and promotion activities. If it is not possible to
generate revenue in a new market or increase revenue in an existing market,
Masan Food cannot recover advertising and marketing expenses, which may
negatively affect gross profit. , financial position, business results.
+ As Techcombank is an affiliated company of the Company, Techcombank's
business activities depend on factors beyond the Company's control. Therefore,
investing in Techcombank does not guarantee profitability for the company. and
does not guarantee that it will not adversely affect the financial position and
business results.
Risk of financial resources: Business acquisition and acquisition requires financial
resources. Any failure in fundraising has the potential to affect the company's
growth strategy, and thereby affect the company's performance.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

GROUP 5

COMPETITOR RISK
Competition from other companies operating in Vietnam: as the parent
company, Masan Group will face competition from domestic and foreign
companies with a development strategy that is directly competitive with the
company mother and in each field of activity. Therefore, the company
cannot guarantee that it will always maintain a competitive advantage over
current and future competitors.
Encountering competition from domestic and foreign companies:
Changes to the competitive environment in which Masan Food operates
may adversely affect its business, financial position, results of operations
and future prospects.
Techcombank faces increasingly stiff competition from domestic and
foreign banks.

INTEREST RISK
Both Masan Food and Techcombank are subject to market risk due to interest
rate fluctuations, mainly from long-term loans, mostly floating interest rates.
Any increase in interest rates leads to an increase in interest payments.
Therefore, when the interest rate increases the interest expense of new loans
together with the interest rate on the Company's existing floating-rate debt,
Masan Food and Techcombank may affect the company's situation. However,
the Company's cash flow can still withstand the impact of interest rate
fluctuations.

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FINANCIAL POSITION AND BUSINESS PERFORMANCE

GROUP 5

STOCK TECHNICAL ANALYSIS

According to the technical chart, 2018 saw a tremendous increase in profit due to the
growth of the Consumer Goods, Resources segment, reduction in selling and
administrative expenses, and reduction in interest expenses as well as non-core one-time
income from TCB However, the share price began to fall gradually in 2019 as a result of the
announcement of the "terrible" merger of Vinmart and Vinmart+ into Masan's hands.
Vingroup and Masan Group have agreed in principle to convert all VinCommerce shares
into new company shares following the merger. Masan Group will take over the operation,
and Vingroup will be the sole shareholder, causing the market capitalization of MSN shares
to plummet by nearly VND 7600 billion. Social distancing, in part due to the severe COVID
epidemic, caused MSN's stock price to plummet in 2020. Because of consumption volume,
there will be a recovery and positive growth by the end of 2020 and early 2021. Packaged
food sales increased dramatically during the COVID-19 epidemic, owing to the introduction
of new products such as high-end convenience food groups with Chinsu meat (instant
noodle soup, instant porridge, and instant vermicelli), Chinsu seasoning powder, cosmetic
products cleaning and household cleaning, and the re-introduction of processed meat
products, as people had a strong need to stock up on packaged foods despite strong social

distancing. It is expected that in 2021 and 2022 MSN will grow even more strongly thanks to
the Point of Line strategy to meet modern consumer needs and the synergy between
business segments.

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INVESTMENT SUMMARY

GROUP 5

VALUATION SUMMARY AND
INVESTMENT RECOMMENDATONS
SUMMARY THE VALUATION

Phase 1: (From 2021 to 2025) unstable growth: According to WACC, the growth
forecast in 2021 is -11,15%, pre-discounted discount period 2020-2025, with the
expectation that MSN's financial position will improve following the merger (8,22
%).
Phase 2: (From 2025 onwards) stable growth: Forecasted long-term growth rate of
4,000% per year. After determining the total PV of cash flows from 2025 onward,
it will be discounted back to 2025 using WACC and gFCF. The WACC is then used
to discount this cash flow from 2025 to 2020.
After that, add all of the PVs, the annual cash flow over the non-fixed
period plus the PV of the horizon value, to determine the company's total
estimated market value. The present market value of debt and preferred
stock is then subtracted from the value of MSN's common equity. Finally,
divide the equity value by the number of outstanding shares to calculate
the intrinsic value of each MSN share.

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INVESTMENT SUMMARY

GROUP 5

VALUATION SUMMARY AND
INVESTMENT RECOMMENDATONS
RECOMMENDATION
MSN's stock price on December 31, 2020 was 88,000 VND/share and
is now 144,800 VND/share (May 30, 2022). M&A activities aid in the
expansion of the consumer segment, and the Point of Line strategy
meets modern consumer needs and synergies between business
segments, but business activities remain unpredictable.
However, based on the financial statements for 2020, it is possible
to speculate that the merger into VinCommercial (VCM) will result in
significant growth for Masan (the fourth quarter business that VCM
recorded for the first time revenue growth is positive EBITDA). As a
result,

MSN's

growth

momentum

is

very

strong,

and

it

is

recommended for long-term investment. However, in the short time
before the complicated Covid-19 outbreak, consumption of essential
goods may decrease, resulting in a slight decrease in MSN.

|Page. 12


VALUATION

GROUP 5

VALUATION
(USING THE FCF METHOD)
STEP 1: HISTORICAL PERCENTAGE OF SALES
AND INPUTS FOR FORECAST
HISTORICAL PERCENTAGE OF SALES

According to the results of operating records for the last five years from 2016 to 2020,
Masan Group Corporation's sales ranged from approximately 37 million to 44 million from
2016 to 2019. However, sales peaked at over 77 million in 2020, more than doubling the
previous year. 2020 had a negative impact on the Covid-19 pandemic, but thanks to the

merger of MCH and VinCommerce (VCM), the Masan market increased dramatically.
The operating cost/sales ratio currently ranges from 78.38 percent to 81.29 percent, with
the highest ratio of 93.62 percent expected in 2020. From 2016 to 2020, the rate of
NOWC/sales tends to fall, reaching a low of 17.36 percent in 2018. In 2019, there is a rapid
growth to 29,7%.
From 2016 to 2020, the rate of NOWC/sales tends to fall, reaching a low of 17.36 percent in
2018. In 2019, the rate of growth has accelerated to 29.7%.
The fixed assets/sales ratio ranges from 68.88 percent to 79.29 percent. The number of
2019 – 109,20 percent – is the highlight. This figure is also a result of the merger; following
the merger, VCM operated 134 Vinmart supermarkets, 2.888 Vinmart+ stores, and 14
VinEco high-tech stores.
The rate of depreciation/fixed assets was not stable, increasing from 7.98 percent in 2016
to 9.26 percent in 2018 and then decreasing to 6.54 percent in 2020.
Capital structure: The company does not have a preferred stock ratio; instead, it has a debt
and equity ratio. The weightage of debt ratio has tended to decrease over time, from 44,56
percent to 26,01 percent, and will increase to 46,40 percent in 2020 as a result of the
merger. The equity weightage is stable at a ratio of 50 to 70 percent, with the highest
being 73,99 percent in 2019.

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VALUATION

GROUP 5

VALUATION
(USING THE FCF METHOD)
INPUTS FOR FORECAST

The company's sales growth rate will be determined by industry growth, and inflation is
expected to be less than 5%. Affected by the COVID-19 pandemic, MSN's gross profit
reached VND 4.314 billion in the first quarter of 2021, with a gross profit margin of 21.6
percent, 0.9% lower than the same period last year.
Based on this, our team predicts that Masan's revenue growth rate in 2020-2021 will be
nearly 5%, with signs of gradually increasing to -1.00 percent in 2022 and gradually
decreasing from -4,00 percent to -7,00 percent in 2023. (2020-2025). Masan's sales growth
rate is negative from 2021 to 2025 because the company has invested but has not yet
reaped profits and is affected by the covid epidemic.
If there is no significant change in the management method in the future, the company's
previous operating costs/sales ranged from 79 to 82 percent. Our group's operating
expenses are expected to be in the 82 to 84 percent range for 2021-2025, rising to 86
percent in 2022 due to the high leverage ratio.
Because the company will not increase its fixed assets in the coming years, the fixed
assets/sales ratio will remain at 79.61 percent from 2021 to 2025.
MML's gross profit margin fell sharply, reaching only 14.3 percent as a result of a sharp
increase in input materials for the feed segment and a high pig price. MCH also has a lower
gross profit margin than the same period last year due to the impact of merging with net
in-home care and higher convenience food input prices.
According to the group's forecast, the company's fixed assets will increase, causing the
depreciation rate/fixed assets to rise from 7.85 percent to 8.00 percent from 2021 to 2025.
(average 5 years 2016-2020).

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VALUATION

GROUP 5

For the company, our team employs a corporate tax of 17.7 percent. The 5-year tax fee was
calculated at the time of calculation.
Long-term growth will be determined by the rate of industry growth. We predict that the
company's growth rate from 2021 to 2025 will be -11,15 percent, and that after 2025, the
company will grow at a constant rate of 4 percent, implying that the company's long-term
growth rate will be around 4 percent. The reason for the negative growth rate (-11.15 percent)
between 2021 and 2025 is understandable. During this time, Masan Group is investing heavily
in other areas such as banking and, in particular, the commercial segment, which includes
Vinmart and Vincommerce. Because this segment has yet to generate a profit for MSN, MSN's
growth index will be negative during this time period.

STEP 2: FCF ESTIMATE

We predicted the company's sales in 2021 in order to be able to analyze the metrics over
time. We forecasted based on sales from 2016 to 2020, and the result was VND 67.007.923
million. In general, sales for the year have decreased compared to 2020, as predicted. In
2025, the company's sales will be VND 21.544.967 million lower than in 2020. After we have
the sales and indicators from Steps 1 and 2, we can calculate the remaining values.
Our team calculates the free cash flow over the years using a forecast table of figures from
2021 to 2025. Due to the ongoing Covid-19 pandemic, the company's free cash flow has
returned to a positive value in 2021, but it is still the lowest compared to previous years;
specifically, the FCF in 2021 is expected to reach VND 1.605.018 million. The company's free
cash flow gradually increased over the years, reaching its peak in 2025 at VND 9.017.748
million.

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VALUATION

GROUP 5

STEP 3: AVERAGE COST OF CAPITAL
ESTIMATE – WACC AND DISCOUNTED FREE
CASH FLOW TO FIRM – FCFF

CAPITAL STRUCTURE
We examine Masan's capital structure using three assumptions based on the
market value of equity and debt:
(1) The market value calculations assume that the company's debt is trading
at par, so the market value of debt equals the book value of debt.
(2) The market value of equity is equal to the price of common stock
multiplied by the number of shares outstanding. Each year on December
31st, the data is collected.
(3) The target capital structure is the five-year average of the market capital
structure between 2016 and 2020.

As a result, we estimate that Masan's capital structure contains 36,4% debt and
63,6% equity, based on the calculations on the spreadsheet page.

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VALUATION

GROUP 5

COST OF DEBT
For interest rates, we compute Cost using data on debt costs from 2016 to 2020,
averaging 5 years, and using it as a measure for Rd. Based on the preceding

assumptions and the conservative factor employed in this study, our team predicts
that if Masan borrows money from a bank next year, the interest rate will be
around rd = 7,57%.

COST OF EQUITY
Beta coefficient: Our team employs the CAPM to compute Masan Company's
cost of equity. The beta coefficient reflects the degree of correlation between
the firm's stock yield volatility and the market portfolio return. In addition, to
ensure the validity of the analytical process, we will use the VN-Index to reflect
the market portfolio and daily return from January 7, 2016, to December 31,
2020. The regression equation is used to calculate the coefficient. In total, there
are over 1250 samples. The calculated beta is 0.603.
Risk-Free Rate: The risk-free rate is the expected rate of return for investors
over the life of their investment. The Rf used in the CAPM model must meet two
requirements. First and foremost, it must be derived from assets that do not
harm or default. Government bonds are a very reliable risk-free yield metric in
Vietnam because the government controls the money supply and tax rights.
Second, the maturity date of the bond must correspond to the investor's
financial plan. In this study, we assess MSN's long-term business prospects. As a
result, we'll use the annual yield on a 10-year government bond of 2.3%. (issued
on 15 September 2016).
Risk Premium: Our team uses Damodaran's estimates for countries of risk
premium. According to the latest update on the website, Vietnam's total risk
premium is 3.49% + 8.21% = 11,7%.
Calculation results: Cost of Equity: rs = 2,3% + 0,603* 11,7% = 9,36%.
After estimating capital structure, cost of equity, and cost of debt, we use the
following formula to calculate the average cost of capital:
Weighted Average Cost of Capital = WACC = Wd* rd* (1 - T) + Wc* rs + Wp* rp
= 36,4%* 7,57%* (1 - 17,7%) + 63,6%* 9,36% + 0%* 0% = 8,22%.

|Page. 17


VALUATION

GROUP 5

STEP 4: VALUING MSN STOCK USING THE
DISCOUNTED FREE CASH FLOW MODEL –
FCFF

The total enterprise value is 173.793.740 million VND, with debt
accounting for 27.352.990 million VND.
We calculated 146.440.750 million VND as the intrinsic value of equity
using the Free cash flow estimate table in step 3.
MSN has 1.174.683,246 million shares in circulation.

Finally, based on the company's value model in 2020, we arrive at 124,664 VND
as the intrinsic value of a share.

|Page. 18


GROUP 5

REFERENCES

REFERENCES
1. Masan Group Website, from
< />fbclid=IwAR2Yi8BwLGmhukYy56Gr5hOD2V7yFan5pymVMlaihgTwjBQBld2p

bxnExEM>;
2. Vietstock (2022). CTCP Tập đoàn Masan (HOSE: MSN) - Masan Group
Corporation, from < />3. Yumbu. MSN, from
< />
|Page. 19