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- 2023: Net revenue was VND118.3tn (-11% YoY) and NPAT-MI was VND168bn (-96% YoY), fulfilling 99% and 37% of our respective full-year forecasts. While revenue was in line with our expectations, the NPAT-MI result fell short of our forecast mainly due to restructuring expenses from (1) closing ICT & CE stores and (2) disposing BHX’s unusable assets.
- Q4 2023: MWG closed 87 TGDD (including TopZone) and 96 DMX (including DMX supermini) stores compared to Q3. BHX also continued the disposal of unusable assets like it did in Q3. As such, there were one-off expenses amounting to VND251bn in Q4. That said, revenue and NPAT-MI managed to increase 4% QoQ and 132% QoQ in Q4, respectively.
- December 2023: MWG’s net revenue was VND10.3tn (+6% YoY; +4% MoM) thanks to (1) strong YoY improvements from BHX monthly sales per store and (2) overall MoM improvements of other businesses.
- TGDD & DMX’s aggregate revenue declined 19% YoY in 2023, completing 98% of our full-year forecast. In Q4 2023, TGDD & DMX’s aggregate revenue increased 2% QoQ, which is driven by shopping season towards year end, in our opinion.
- BHX’s monthly sales/store improved 20% from June to December, which is in line with our expectations. We believe BHX’s strong focus on its variety of fresh produce remains key to its uplift in store traffic. BHX’s sales/store was ~VND1.82bn in December, inching up from ~VND1.75bn in November 2023. BHX’s management is confident that the chain will generate positive NPAT for the full year 2024.
- Profitability: In Q4 2023, MWG’s EBIT margin improved 80 bps QoQ to 0.9%, which is relatively in line with our forecast mainly thanks to TGDD & DMX’s EBIT improving by 70 bps QoQ to 2.4% and BHX’s EBIT improving 150 bps QoQ to -1.4% in Q4. Nonetheless, BHX’s EBIT margin in 2023 slightly fell short of our expectations.
- Our view: Although ICT demand remains stagnant, ICT’s operating margin improved well QoQ in Q4 and exceeded our forecasts. Nonetheless, BHX’s operating margin fell short of our expectations while sales are in line. Altogether, we do not foresee material change to our 2024 forecast, pending a fuller review.
MWG’s Q4 and 2023 results
VND bn | Q4 2022 | Q4 2023 | YoY | 2022A | 2023A | YoY | 2023F | 2023A as % of 2023F |
Net revenue | 30,589 | 31,422 | 3% | 133,405 | 118,280 | -11% | 119,575 | 99% |
| 7,685 | 7,597 | -1% | 34,685 | 28,269 | -18% | 29,039 | 97% |
| 14,970 | 13,545 | -10% | 68,970 | 55,237 | -20% | 56,130 | 98% |
| 7,081 | 9,258 | 31% | 27,081 | 31,581 | 17% | 31,646 | 100% |
| 852 | 1,022 | 20% | 2,668 | 3,194 | 20% | 2,760 | 116% |
Online sales 1 | 4,536 | 4,688 | 3% | 18,930 | 16,848 | -11% | 16,409 | 103% |
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Gross profit | 8,009 | 6,186 | -23% | 30,862 | 22,521 | -27% | 22,530 | 100% |
SG&A expenses | -6,975 | -5,908 | -15% | -24,218 | -22,114 | -9% | -22,036 | 100% |
Net financial income | -70 | 185 | N.M | -69 | 611 | -979% | 468 | 131% |
EBIT | 1,034 | 278 | -73% | 6,644 | 407 | -94% | 494 | 82% |
| 2,026 | 514 | -75% | 10,243 | 1,879 | -82% | 1,776 | 106% |
| -715 | -126 | -82% | -2,961 | -1,031 | -65% | -996 | 104% |
| -133 | -109 | -18% | -306 | -343 | 12% | -331 | 104% |
| -144 | -1 | -99% | -331 | -98 | -70% | 0 | N.M. |
Net other income/ loss | -31 | -244 | 692% | -518 | -328 | -37% | -69 | 475% |
NPAT-MI | 619 | 90 | -85% | 4,100 | 168 | -96% | 449 | 37% |
Gross margin | 26.2% | 19.7% |
| 23.1% | 19.0% |
| 18.8% |
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SG&A/net sales | -22.8% | -18.8% |
| -18.2% | -18.7% |
| -18.4% |
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EBIT margin | 3.4% | 0.9% |
| 5.0% | 0.3% |
| 0.4% |
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| 8.9% | 2.4% |
| 9.9% | 2.3% |
| 2.1% |
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| -10.1% | -1.4% |
| -10.9% | -3.3% |
| -3.1% |
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NPAT-MI margin | 2.0% | 0.3% |
| 3.1% | 0.1% |
| 0.4% |
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Source: MWG, Vietcap (1 Online sales are included in segmental sales presented above; 2 Vietcap estimates)
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