Summary of the 2021 H1 results of Mobile World Group (MWG VN)
H1/2021 results: highlights
- Net revenue advanced by 12.3% y/y to VN62,487 bn in H1/2021, primarily thanks to a strong increase of 41.4% y/y from sales in the groceries chain (Bach Hoa Xanh – BHX), while sales from the mobile phone store chain (The Gioi Di Dong – TGDD) and from the electronic devices store chain (Dien May Xanh – DMX) grew moderately by 8.0% and 5.0% y/y respectively. The same-store sale growth (SSSG) of BHX turned positive at 15% in Q2/2021 from a negative rate of 10% in Q1/2021. SSSG of both TGDD and DMX were strong at 14% in Q2/2021 versus a negative rate of 9% in Q1/2021.
- The operating margin remained nearly unchanged at 5.1%. Net financial income improved thanks to a higher net cash position. All in all, net profit grew by 25.9% y/y to VND2,551bn.
- The number of stores reached 4,555 by the end June, +496 stores YTD, including 936 TGDD stores (+23), 1,731 DMX stores (+304) and 1,888 BHX stores (+169).
- Regarding the current Covid-19 outbreak, by the end of June, MWG had over 1,000 stores out of a total 2,667 TGDD and DMX stores. By the end of July, the amount of store closures had escalated to 2,000. The situation is expected to worsen in August as a result of stricter social distancing policies. Per management, they aim to continue selling at about 40% of the normal rate for the TGDD and DMX store chains while BHX will benefit from traditional wet markets being required to close during the lockdown. As the grocery store chain contributes only 21% of MWG’s in total sales and is still operating at loss, the benefit of BHX stores will only partly compensate for the loss of TGDD and DMX stores.
- We revise 2021’s net revenue and net profit down by 5.5% and 15.3% respectively. Due to the prolonged lockdown period in some areas, many MWG’s TGDD and DMX stores must close or reduce operational capacity. While BHX is expected to have higher sales, its operating margin is lower than TGDD and DMX’s. As for 2022, we maintain an unchanged top line and bottom line.
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