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MWG – Back to growth trajectory – Update

Company Note 02/12/2021    270

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  • In Oct 21, MWG’s revenue reached VND12,186bn (+39% yoy) and net profit (NP) reached VND568bn (+86% yoy).
  • For 10M21, MWG posted revenue of VND99,006bn (+10% yoy) and net profit of VND3,906bn (+19% yoy), completed 79% our net profit forecast.
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Market Price

Target Price

Dividend Yield

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VND138,900

VND180,500

0.73%

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     Consumer Services

DMX&TGDD’s revenue grew robustly after social distancing
In Oct 21, MWG’s revenue reached VND12,186bn (+39% yoy) and NP reached VND568bn (+86% yoy) thanks to (1) the re-openings of all TGDD (Mobile phone chain) & DMX (Consumer electronics chain) stores after social distancing; (2) high pent-up demand effect; and (3) increasing Iphones sales thank to the launch of new 13 series altogether with the introduction of Topzone chain stores. For 10M21, MWG posted revenue of VND99,006bn (+10% yoy) and net profit of VND3,906bn (+19% yoy), fulfiling 79% our full-year net profit forecast.

First profitable time of Bach Hoa Xanh in 3Q21
With average monthly revenue of VND1.59bn per store, BHX achieved its first profitable time in 3Q21, showing its ability to meet high demand with a strong logistics system and affirming BHX’s growth potential. However, with people from southern industrial-economic centers return to their hometown and general market re-opened, BHX will be struggled in the next 3-6 months before returning to growth stage. Thus, we revised down our forecast of revenue of each BHX store monthly for 2022/23F by 12.7%/8.5% vs. previous report, reaching VND1.44bn/VND1.73bn per store.

Apple’s products sale will lift up TGDD’s revenue in FY22/23F
In Sep 21, MWG has launched Topzone store chain which is an Apple authorized store chain. As 1) market share of MWG’s Apple products sale is only 23% which give room for MWG to expanse, 2) new regulations tighten hand-carrying products and 3) Apple’s new warranty policy that only applies to genuine products in Vietnam will help MWG’s Apple products sale became the growth engine of TGDD chain in FY22/23F. Thus, we increased TGDD’s chain revenue by 13.3% / 21.8% vs. previous forecast.

Changes in FY22-23 earnings forecasts
We change MWG’s revenue in FY22/23F by -2.1%/+0.16% vs. previous forecast to reflect above changes but lift net financial income by 24.2%/126.6% vs previous forecast thanks to the prolonged period of low interest rates. As the results, we lift our forecast for FY22/23F net profit by 0.4%/24.3% to VND6,598bn (+40.3% yoy)/VND8,329bn (+26.2% yoy).

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