Berli Jucker Public Co Ltd: Vietnam growth lifts outlook
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Upgrade from HOLD to BUY with unchanged DCF-based TP of THB17.00
Acquiring MMVN (Vietnam’s only wholesaler) to tap fast-growing consumption in one of the region’s highest GDP growth markets
- MMVN’s store network to expand from 20 to 47 stores by 2030, capturing rising modern trade penetration in Vietnam
- Deal valuation appears rich short-term, but earnings expected to be accretive with a steady growth outlook
Transaction recap
BJC’s board approved the acquisition of 100% of TCC Land International (Singapore) Pte. Ltd., which indirectly owns MM Mega Market (Vietnam) or MMVN, through its subsidiary C-Distribution Asia. We note that the transaction is classified as a connected transaction and will require shareholder approval. The deal is currently scheduled for an Extraordinary General Meeting on 13 February 2026 (via electronic means) to seek approval for the transaction and related matters.
Background: MMVN is a major wholesale distributor with 30 branches across Vietnam (including Hypermarket in Danang opened in November 2025), focusing on professional business customers and offering wholesale pricing and mega-sized products. MMVN has a diversified sales mix through both B2B customers (c.55%) and B2C customers (c.45%).
Transaction value and timeline: The transaction value is c. THB22.5bn where the closing date is targeted to be April 2026. At the closing, the company will fund the transaction using bridging loan with finance costs of 2.25%. Then, the company plans to refinance with debenture with expected finance costs of 2.58% (vs 3.03% currently).After the transaction, net gearing is expected to increase from 1.26x to 1.54x, which is still lower than debt governance. However, management highlighted their Debt to EBITDA ratio would increase from 7.4x to 8.3x after the transaction. To maintain the current Tris Rating of A, the company’s Debt to EBITDA is required to be lower than 8.0x.
Thus, management has disclosed that the company is planning to divest some unutilised land blank to partially support the deal over mid to long term. According to BJC, the company intends to sell 33 land sites (9 sites are currently used to operate Big C). These lands including those occupied by Big C stores are not contributing profit, and the company could save c. THB100mn.
The company has hired several consultants, and aims to sell the sites at market prices through public bids. At the transaction closing date (April 2026), the remaining unsold land will be sold to TCC (at market price and this sale will require approval from shareholders in AGM). Management forecasts the net proceeds from the land investment could up to c. THB7bn, and BJC will likely book extra gains of c. THB1bn.
The success of land divestment will lower its net gearing to 1.4x and Debt / EBITDA ratio to 7.2x. At the same time, this would help lessen finance cost burden related to the deal by c. THB144mn from THB405-464mn p.a. (without land divestment).
Accelerating expansion and growth for MMVN: After acquisition, BJC aims to accelerate MMVN’s expansion by opening 27 more stores over the next 5 years (until 2030) – with capex of THB500-1,000mn p.a. Management stated that the expansion of MMVN could be supported by its internal cashflow from operation. According to management guidance, most formats will reach NPAT breakeven within 2–4 years, implying attractive incremental returns without balance sheet strain.
Synergies to be reaped over 2026-2028: After acquisition, the synergies are expected to reach c. THB 370–500mn by year three, driven by merchandising scale, private label expansion, back-office consolidation, IT integration, and supply-chain optimization. Beyond quantified synergies, BJC should gain a strategic platform for regional expansion, procurement leverage, and long-term participation in Vietnam’s modern trade and food service growth, which would be difficult to replicate organically.
Vietnam site visit
Fast growing market. During presentation, management shared that Vietnam represents one of the most attractive consumption growth markets in the region, supported by steady GDP growth of 6–8%, a young and expanding working-age population, rising urbanisation, and structurally increasing modern trade penetration, which remains relatively low at around 38%.
Tourism recovery and strong foreign direct investment inflows continue to reinforce demand in food services and professional consumption channels. Against this backdrop, Vietnam’s retail and wholesale market offers long-term structural growth, particularly for operators with scalable formats, sourcing advantages, and strong B2B exposure.
Only modern-trade grocery wholesaler in Vietnam. MMVN is strategically positioned to capture this opportunity as the leading national wholesaler in Vietnam, differentiated by its wholesale DNA rather than pure hypermarket or lifestyle retail positioning. MMVN operates a defensible B2B-led model with c.2 million registered members and a sales mix of c. 55% professional customers and 45% household consumers. Within the professional segment, HoReCa represents the largest contributor, accounting for around 44% of total sales. This customer mix provides relative insulation from purely price-driven competition and aligns MMVN closely with Vietnam’s tourism and food service growth.
The core strength of MMVN lies in its sourcing-led margin structure and vertically integrated supply chain. The company operates multiple direct sourcing platforms across vegetables, fruit, fish, and pork, supported by cold-chain logistics and regional distribution centres. This farm-to-fork model reduces reliance on intermediaries, improves cost efficiency, and ensures consistent food safety and quality, which are critical for HoReCa customers. As a result, MMVN enjoys high customer stickiness, high switching costs among professional customers, and stable repeat purchasing behaviour, with member sales penetration exceeding 85%.
Based on our on-the-ground assessment, food quality and traceability have become increasingly critical purchasing criteria, particularly for B2B customers. During our MMVN store visit, we observed that the store has preserved large areas for fresh food, which accounts for 35% of sales on average and delivers relatively higher margins. The fresh food offering is a key differentiator, featuring live stations for seafood and fresh meat, alongside QR-code traceability that allows customers to verify farm origins and catch dates—enhancing transparency and trust.
We also gained insights into MMVN’s disciplined pricing strategy, which categorises products into three tiers: very price-sensitive, price-sensitive, and non-price-sensitive items. The company applies dynamic pricing through a price index mechanism across categories to preserve price competitiveness versus other retailers while protecting margins where pricing power exists.
Overall, store traffic was healthy—partly supported by proximity to the Vietnam Tet Festival—with stores well-organised, clean, and customer-friendly. In-store food trial booths were actively deployed, which we believe can effectively stimulate impulse purchases and basket size.
In addition, we visited one of MMVN’s B2B customers operating catering services for schools and events. This reinforced our view that MMVN’s competitive edge extends beyond pricing to include its ability to deliver large volumes of high-quality products in a timely manner, while offering problem-solving support tailored to customer needs. This operational readiness further strengthens MMVN’s value proposition in the B2B segment.
Our view
Rich valuation in the short-term but earnings accretive over time. We view the valuation of this deal as relatively expensive at 35.7x FY25F P/E, which could decline to 28.6x in FY26F if MMVN delivers the 25% earnings growth forecasted by IFA. Assuming earnings growth of 10%, the profit contribution from the deal should be sufficient to cover annual finance costs of THB405mn (net of tax) and could lift FY26F earnings by 4.2%.
If the 10% growth continues into FY27F, earnings accretion could rise by a further 6% for FY27F earnings. A successful land divestment could add incremental upside to FY26F/FY27F earnings at 2.1%/2.9%, respectively.
Still, we believe risks remain on the execution. The company may face rising operating expenses from new store openings, while revenue growth could stay challenged amid a volatile economic environment. Also, in the case that the company could not find the new favourable funding source after three years, this might lead to earnings dilutive from the deal.
Recommendation
Upgrade from HOLD to BUY with unchanged TP of THB17.00. While we trimmed FY25-27F earnings by 2%-3% due to more conservative rental income assumptions, we rolled our valuation to 2026, keeping our DCF-based TP of THB17.00 unchanged (WACC of 8.4%, terminal growth of 1%). We believe the recent share price weakness has already priced in concerns over MMVN’s valuation. Meanwhile, Vietnam expansion offers strong medium to long term growth potential. With higher upside, we upgrade our call to BUY.
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