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- We increase our target price (TP) for MWG by 12% but downgrade our rating to OUTPERFORM from BUY as the stock has rallied ~30% over the past four months.
- Our higher TP is driven by a 76% increase in our aggregate forecast NPAT for Bach Hoa Xanh (BHX) in 2023F-32F following a stronger-than-expected improvement in sales/store in 7M 2023. Meanwhile, we cut our aggregate 2023F-27F net income for The Gioi Di Dong & Dien May Xanh (TGDD & DMX) by 14% following weaker-than-expected margins in Q2 2023. We lower our 2023F NPAT-MI for MWG by 27% but increase our 2024/25F forecasts by 4%/1%, respectively.
- We expect BHX’s sales/store to rise 12% from July to VND1.8bn in December 2023 (high season), normalize to VND1.78bn in 2024F (vs our previous forecast of VND1.4bn), and then increase 4% to VND1.86bn in 2025F (vs previously VND1.5bn). We expect the chain to break even in net profit in Q4 2023 (vs our previous forecast of Q4 2024) and deliver net profit of VND525bn in 2024F (equivalent to 15% of our 2024F NPAT-MI for MWG).
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