Masan acquires stakes of Phuc Long tea and coffee brand

Masan, the Vietnamese retail conglomerate, has acquired a 31% stake in tea and coffee chain Phuc Long with a valuation of US$110 million.

The latest purchase put Phuc Long’s valuation at $355 million. Photo: Masan

After the deal, Masan owns 51% shares of Phuc Long, becoming the parent company of the popular brand in Vietnam, and will consolidate the business results of this system into the financial statements of the group.

The latest purchase put Phuc Long’s valuation at $355 million. The group said Phuc Long increased the price-to-earnings (P/E) ratio by about 15 times is based on preliminary estimated earnings of 2022.

In late May 2021, billionaire Nguyen Dang Quang's group spent $15 million to buy a 20% stake in Phuc Long, equivalent to the valuation of this coffee and milk tea chain at $75 million. After less than a year, the value of Phuc Long has increased by nearly five times.

Masan forecast Phuc Long's revenue of VND3trillion ($132.5 million) in 2022. The group's goal is to bring the milk tea kiosk model into 1,000 retail stores within 12 months. The group also piloted a kiosk model selling coffee and milk tea inside the system of 50 Winmart+ (formerly VinMart+ stores).

This year, the group will continue to replicate the mini-mall model, integrating pharmaceuticals, personal financial products, entertainment services, and telecommunications into shopping services of supermarkets and mini WinMart+.

The group expects its consolidated net revenue to reach between VND90 trillion and VND110 trillion ($3.97 billion and $4.8 billion) in 2022.

Last year, Masan's consolidated net revenue reached more than VND88.6 trillion ($3.9 billion), up 14% compared to 2020. Its profit was VND10.1 trillion ($445.5 million) up more than 6 times over the previous year.