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Having spent over 270 million USD to acquire Phuc Long, Masan only gained a meager profit of 38 billion VND from it.


Although spending billions of Vietnamese dong to own up to 85% of the shares of Phuc Long, the tea and coffee brand only brought a modest net profit of 38 billion VND for Masan last year – As stated in the audited Consolidated Financial Statements for 2022 of Masan Group

Recently, Masan announced its audited financial report for the year 2022. According to the report, during the period from the acquisition date to December 31, 2022, the acquired business operations (Phuc Long) contributed 1.579 trillion VND in revenue and 38 billion VND in net profit to the group’s business results.

This is a very modest figure compared to the amount Masan spent to own 85% of the shares of this tea and coffee brand, as well as the expectations of both Masan and independent parties when the news of Phuc Long joining Masan was widely spread on the media.

Phuc Long is a well-known name in the Vietnamese tea and coffee industry, established in 1968 in Bao Loc, Lam Dong province. However, it was not until 2012 that they started to think about processing into drinks such as milk tea, and fruit tea,… to sell to customers, instead of only selling tea and coffee as before.

Initially, Phuc Long only opened two stores located in the center of District 1 – Ho Chi Minh City, and only after Starbucks entered Vietnam, and milk tea began to emerge as a hot-trend drink, this business started to expand its business and the Phuc Long brand became famous in the F&B community.

In May 2021, Masan – through its direct subsidiary, The Sherpa Co., Ltd., acquired a 20% stake in Phuc Long Heritage Joint Stock Company for 15 million USD (about 352 billion VND), corresponding to a valuation of 75 million USD.

After the first capital injection, Masan piloted the kiosk model for selling coffee, and milk tea inside the VinMart+ retail chain system, now renamed Winmart+. The group’s goal is to bring the milk-tea kiosk model to 1,000 retail stores within 12 months.

At that time, Masan predicted Phuc Long’s revenue could reach 2,000-3,000 billion VND  in 2022 after expanding its network of stores and kiosks inside mini WinMart+ supermarkets, along with diversifying its product portfolio.

Not only Masan, but independent analysts also expected Phuc Long to be like a soaring tiger when becoming a piece of Masan’s ecosystem. According to a report by Vietcombank Securities (VCBS) in September 2021, Phuc Long’s revenue after joining forces with WinCommerce is expected to reach an additional 1,750 billion VND per year.

A Masan integrated Phuc Long kiosk

Half a year later, in January 2022, Masan bought an additional 31% stake in Phuc Long, raising the ownership rate to 51%, thereby taking control of this beverage brand.

The price the big man has spent this second time is 110 million USD (nearly 2,500 billion VND ) for 31% of Phuc Long shares, corresponding to the equity valuation of this company is 355 million USD, about more than 8,000 billion VND.

This means that, after only about 7 months, the value of Phuc Long has increased by nearly 5 times.

In August 2022, Masan continued to buy an additional 34% of Phuc Long’s share capital with a total payment of VND 3,617.9 billion (equivalent to about 154 million USD).

A Phuc Long flagship store

After more than a year of integration into Masan, the most visible thing that can be seen is the number of almost 1,000 Phuc Long kiosks creeping into many provinces and cities nationwide. In the provinces, examples can be cited such as Hai Duong with up to 20 Phuc Long kiosks, Hai Phong with 14 kiosks, and Hung Yen with 29 kiosks…

However, rapid growth in terms of quantity does not mean an increase in profit. Time has proven that the Phuc Long kiosk model is not effective. Masan itself admits that they have had to close down poorly performing kiosks and this has cost them 42 billion VND.

In addition, the company’s management is conducting a comprehensive evaluation in Q1/2023 to determine the optimal operating model before continuing with expansion.

Extracting from Masan’s published data, the entire year of 2022, the Phuc Long kiosk system and mini shops only generated 426 billion VND in revenue, equivalent to about 27% of the total revenue for the Phuc Long and EBITDA system, which is in red with 134 billion VND (the actual loss figure is higher due to not subtracting interest expenses and depreciation).

When compared to the figures for Q3, the Phuc Long kiosk system (and mini shops) only generated a revenue of 44 billion VND while incurring an additional loss of up to 100 billion VND in Q4/2022.

The profit of the entire Phuc Long system relies on the “burdened” flagship stores, with a revenue of 1,153 billion VND and EBITDA of 332 billion VND.

Although the 2022 business results are modest, Masan still expects Phuc Long to become the number one tea and coffee company in Vietnam within the next few years, aiming to conquer the international market.


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