Portfolio Updates | January 2025
Kenno's Vietnam-focused fund centers on the country's domestic consumption market, driven by strong economic growth and a rapidly expanding middle class. In this article, we’re excited to share updates on FPT (technology), MWG (retail), TNH (healthcare), and MSN (consumer goods) with the following highlights:
FPT’s AI Factory Partnership with NVIDIA
FPT announced its USD 200 million collaboration with NVIDIA Corporation to develop two AI factories, one in Japan and another in Vietnam. These facilities are already under construction, with USD 50 million disbursed for each by November 2024.
Launching event of the FPT AI Factory.
Photo: FPT
This strategic partnership allows FPT to target high-demand sectors, including healthcare, manufacturing, and finance, in both countries where the factories are located. It also presents a unique opportunity for the company to offer end-to-end AI product packages at more affordable costs compared to global industry leaders like Google and Microsoft.
With operations set to launch early this year, FPT anticipates USD 100 million in revenue, a 50% EBITDA margin, and a 25% IRR, supported by an expected 90% utilization rate in 2025.
Bach Hoa Xanh (MWG)'s Expansion in Central Vietnam
MWG's grocery chain, Bach Hoa Xanh, has returned to its growth trajectory with its first regional expansion in three years following extensive restructuring and transformation. The company recently opened 15 new stores in Vietnam's central provinces, including Da Nang, Quang Nam, and Quang Ngai.
MWG's Bach Hoa Xanh expands to Central Vietnam.
Photo: Bach Hoa Xanh
Optimizing operations and supply chains has reportedly helped the company turn profitable in Q2/2024. With a current network of 1,750 stores across Vietnam, Bach Hoa Xanh holds around 3% of the country's FMCG and grocery market and now aims to capture a 10% market share in the coming years.
TNH's Third Hospital Facility Opens
In November 2024, Thai Nguyen Hospital Group launched its third facility, the TNH Viet Yen Hospital, with an initial capacity of 150 beds, expandable to 300 as demand grows. The hospital boasts modern equipment and specialized services across departments such as internal medicine, surgery, obstetrics, and pediatrics.
TNH Viet Yen Hospital in Bac Giang Province.
Photo: TNH
According to TNH, daily patient visits at Viet Yen Hospital have already averaged 100—approximately one-third of the flow at its Yen Binh Hospital, which has been operating for over five years. With a fourth hospital slated to open by late 2025, TNH is showing strong signs of earnings growth and commitment to establishing a leading position in Vietnam's private healthcare sector.
MSN's High-Tech Materials Divestment to Mitsubishi
In December 2024, Masan Group (MSN)'s high-tech materials arm, MHT, announced that it had finalized the sale of 100% of H.C. Starck Holding GmbH to Mitsubishi Materials Corporation, as first reported in May 2024. The transaction resulted in a one-time after-tax profit gain of approximately USD 40 million.
MSN's high-tech materials factory.
Photo: Masan High-Tech Materials
Masan will retain its stake and potential profits from a few assets progressing toward large-scale commercialization, including Nyobolt battery manufacturing and "black mass" recycling technology.
The proceeds will reduce MHT’s debt from approximately USD 670 million to USD 490 million. MSN also anticipates a drop in its net debt-to-EBITDA ratio to 3.17x by year-end 2024, well within its target of maintaining a ratio below 3.5x. The divestment of non-core businesses is expected to reduce leverage and strengthen Masan Group's financial stability.
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Disclaimer:
This document is prepared by Kenno Asset Management Pte. Ltd. ("Kenno"), the investment advisor for the Asia Top Picks Fund which is open only to professional investors. This marketing communication does not constitute investment advice. Please refer to Kenno’s official fund documents before making any final investment decision. The information provided in this document is accurate as of the time of writing. Kenno does not guarantee the ongoing accuracy or completeness of this information and is not responsible for updates or changes after publication.