Mobile World finds a way to solve the growth problem

With a target of VND150,000 billion in net revenue and VND4,850 billion in after-tax profit, Mobile World Investment Corporation also set out a significant growth plan for its core chain stores.

Accelerate to regain form

Compared to 2023, the business results of Mobile World Investment Corporation (code MWG) in 2024 had a strong breakthrough. Net revenue from sales and service provision reached 134,341 billion VND, an increase of 13% compared to 2023. Gross profit margin improved, bringing gross profit to 27,499 billion VND, equivalent to growth of 22%.

Of which, revenue from mobile phones, computers and electronic devices reached 91,100 billion VND, revenue from food and fast-moving consumer goods reached 41,088 billion VND, accounting for 67% and 30% of total revenue respectively. However, the food and fast-moving consumer goods segment had a much higher gross profit margin at 24%, while the electronics segment only reached 18%. As a result, the profit after tax for the whole year reached 3,733 billion VND, 22 times higher than the previous year.

Profit in 2024 achieved high growth, but in fact, the reason comes from the sharp decline in Mobile World's profit in 2023. Compared to the period 2021 - 2022 (profit was over 4,000 billion VND), the Company has not yet regained its form.

In 2024, Mobile World set a not-so-ambitious target, with a revenue plan of 125,000 billion VND and a profit after tax of 2,400 billion VND. In just 9 months, the Company exceeded its plan. The profit after tax for the whole year exceeded 55%.

After a year of recovery, Mobile World has set a big target again, with net revenue of VND150,000 billion and after-tax profit of VND4,850 billion, corresponding to a 30% growth in profit. This plan is close to reaching the record profit figure of 2021.

In terms of revenue structure by chain, Dien May Xanh and Bach Hoa Xanh chains are contributing the largest revenue, with 44.3% and 30.6% respectively in 2024. In terms of business products, phones, accessories and other mobile devices bring in 35.1% of revenue, while fresh food and FMCG contribute 30.6%.

Series of plans for chain stores

The Gioi Di Dong has revealed a series of plans for its chain stores. Specifically, with the Thegioididong.com chain (including Topzone) and Dien May Xanh, the Company aims to increase revenue by over VND4,000 billion, despite the unfavorable general market. The Company will not expand offline stores, consider replacing them, as well as optimize and focus on growing revenue at old stores.

On the online channel, Mobile World will build a technology and electronics shopping destination with a diverse portfolio, focusing on services. As for the orientation with the Topzone chain, the Company determined that this is a strategic bridge between the Company and Apple to realize the goal of 1 billion USD in revenue from Apple retail at the chains by 2027.

Mobile World has set a rather large target for the Bach Hoa Xanh chain with the vision of becoming the leading food and consumer goods retail chain in Vietnam, with a revenue of 10 billion USD before 2030. In 2025 alone, the goal for this chain is to increase revenue by at least 7,000 billion VND, open 200-400 new stores, of which online revenue will grow by at least 300% compared to 2024. This chain of stores will start making a profit in 2024, but the accumulated loss is currently over 8,651 billion VND.

Other store chains are also expected to grow well by Mobile World, such as the Avakids chain with a revenue target of over 10% increase, the Erablue chain with revenue increase of over 50% and the An Khang Pharmacy chain expecting to break even in the second quarter of 2025. These figures show Mobile World's ambition to increase market share, but feasibility is still a concern and has received different forecasts from analysts.

SSI Securities Company is quite cautious when considering the target numbers of Mobile World. Regarding the revenue target of 10 billion USD set for the Bach Hoa Xanh chain, SSI assesses that this is quite an ambitious number in the context of the mini-supermarket model and the current modest speed of opening new stores.

Mobile World's 2025 revenue and profit plan shows that the profit of the technology and electronics product segment will remain the same as last year in the context of slow consumption recovery. SSI believes that despite the slow consumption recovery, Mobile World has a suitable business model along with a phone replacement cycle that is expected to boost significant profit growth in 2025. However, it may be necessary to adjust the 2025 profit estimate down due to weaker-than-expected consumption growth.

Meanwhile, Shinhan Securities forecasts Mobile World's revenue and profit to be higher than the company's plan. Specifically, this securities company forecasts Mobile World to reach VND150,628 billion in revenue and VND5,010 billion in after-tax profit. This is a record profit for Mobile World and 3% higher than the plan.

Impact of tightening consumption trend

According to PwC’s 2024 consumer survey, Vietnamese consumers are still affected by rising prices for food, energy, housing and other essential goods, which significantly impacts their spending. 64% of respondents said they still spend the majority of their spending on food and 48% on healthcare. In contrast, 33% of survey participants said they would cut spending on luxury items and about 30% would reduce purchases of non-essential items.

Source: https://baodautu.vn/the-gioi-di-dong-tim-loi-di-giai-bai-toan-tang-truong-d250391.html