MWG shares stir as identity of buyer of 5% of Bach Hoa Xanh's capital revealed

MWG shares reversed from a decrease in price to more than 5.6%, at one point reaching nearly 53,000 VND when the board of directors announced that it had sold 5% of Bach Hoa Xanh's capital and the buyer was CDH Investments.

Shares of Mobile World Investment Corporation (stock code: MWG) have gone from a cautious trading state to excitement after the company announced the completion of the Bach Hoa Xanh capital sale. Specifically, this morning, MWG decreased by 0.5% compared to the reference and continued to decrease for two consecutive sessions. However, not long after, this stock reversed to green and gradually widened the increase range to 5.6% compared to the reference to 52,800 VND. This is the highest price range of this stock since the end of September 2023 until now.

This morning, Mobile World announced that its member unit, Bach Hoa Xanh Investment and Technology Joint Stock Company, has completed the transaction of selling individual shares to investors. According to Mobile World's leaders, with Bach Hoa Xanh's positive cash flow and continuously improving business results, especially the goal of starting to have after-tax profits at the company level from 2024, Bach Hoa Xanh does not need to offer up to 20% of its shares as originally planned, but only sells 5%.

Mr. Thomas Lanyi, head of CDH Investments Southeast Asia, said that this transaction marks CDH Investments’ latest commitment to Vietnam and its second transaction with Mobile World. According to Mr. Thomas, Vietnam is one of CDH’s priority markets in Southeast Asia and the organization is optimistic about the future of the retail sector here.

“Consumer demand is evolving towards modern retail chains instead of traditional markets and Bach Hoa Xanh is ideally positioned to capture this potential. We thank the Mobile World and Bach Hoa Xanh teams for their trust and are excited to partner for the next phase of profitable growth,” Mr. Thomas Lanyi wrote in the announcement of the cooperation.

Mobile World said that during the transaction process, many potential investors (including reputable financial investors and strategic investors) researched information, met with the company, participated in competitive bidding, conducted a business review process and negotiated to purchase shares.

Bach Hoa Xanh selected the partner to receive the transfer of shares based on 4 criteria. First, this investor is reputable and willing to make a minority equity investment. Second, this investor is willing to offer to buy new common shares (primary shares) through a direct equity transaction with a simple transaction structure.

The transferee must also be willing to offer a valuation that reflects the positive changes in Bach Hoa Xanh's business results and the long-term potential of Bach Hoa Xanh Investment and Technology Joint Stock Company. The final criterion is that this organization must be willing to support and assist the Board of Directors in realizing long-term development plans, not directly participate in operational activities, and not manage or control Bach Hoa Xanh Investment and Technology Joint Stock Company and its subsidiaries in any form.

Mobile World aims to record revenue of VND125,000 billion this year, up 6% over the same period and after-tax profit of VND2,400 billion. Of which, Bach Hoa Xanh chain is expected to contribute 30% of revenue, achieving double-digit growth, while increasing market share and starting to bring in profits.

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