Mobile World's (MWG) 2023 profit could drop by up to 80%

Net profit in 2023 could fall 80%

In a newly published analysis report, BVSC Securities forecasts that Mobile World Investment Corporation's (MWG) net profit in 2023 will drop sharply to VND1,231 billion, equivalent to an 80% decrease compared to 2022.

BVSC forecasts that MWG's 2023 profit could decrease by up to 80% compared to the same period last year. — BVSC forecasts that MWG's 2023 profit could decrease by up to 80% year-on-year. Source: TL

In particular, BVSC estimates that in 2023, the net profit of the Mobile World/Dien May Xanh (TGDD/DMX) chain will be recorded at VND2,306 billion, down 69% compared to 2022. The basis for BVSC to estimate that the profit of the TGDĐ/DMX chain will plummet is because mobile phones are non-essential goods and will likely take a long time to fully recover, which explains the cautious forecast for the 2024-2025 period.

Meanwhile, the profit of Bach Hoa Xanh (BHX) chain is forecasted by BVSC to continue to lose another VND1,074 billion, while last year it also lost VND2,961 billion. This securities company also estimates that MWG's department store chain may continue to lose another VND366 billion in 2024, and will start to make a profit of VND161 billion in 2025.

Previously, MWG had just experienced a difficult first quarter of the year with a sharp decline in its workforce. At the end of the first quarter, MWG had 68,048 employees, a decrease of nearly VND6,000 billion compared to the beginning of the year and a decrease of more than 12,000 employees compared to 6 months earlier.

In the first quarter of 2023, MWG's net revenue reached more than VND 27,105 billion, down 28% year-on-year. The retailer's gross profit decreased by 36% to VND 5,214 billion, equivalent to a net decrease of more than VND 2,900 billion compared to the same period in 2022. After deducting expenses, MWG's net profit was only VND 21 billion, down 99% year-on-year.

As for BHX, in the first quarter of 2023, the chain continued to report a loss of VND 354 billion. Previously, Bach Hoa Xanh had continuously suffered losses from 2016 to 2022. The total loss after adding the first quarter of 2023 was VND 7,749 billion.

Foreign funds continuously sell stocks

In the context of poor business performance, many foreign funds have not hesitated to sell millions of MWG shares recently. Most recently, on May 24, Arisaig Asia Fund Limited - a member of Arisaig Partners (Asia) Pte Ltd sold more than 1.3 million MWG shares, thereby reducing its ownership to 6.45%. Previously, this foreign fund also sold 2,397,200 MWG shares to reduce its ownership on April 11.

In addition, on April 3, the Dragon Capital-related fund group sold 979,600 MWG shares to reduce its ownership from 8.01% to 7.94% of charter capital. Of which, Amersham Industries Limited fund sold 1 million shares and Hanoi Investments Holdings Limited fund bought 20,400 shares.

In the market, MWG shares have recently had a positive recovery but have not yet escaped the long-term bottom. This stock is currently at 40,800 VND/share, up about 8% from the lowest level in more than 2 years but only about half of the peak reached more than 1 year ago.

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