After eight consecutive years of losses, the Chairman of The Gioi Dien Dong (Mobile World ) believes that the chain will experience strong growth and become profitable this year.
Unlike previous years, the opening remarks at the shareholders' meeting of Mobile World Corporation on the afternoon of April 13th this year were a thank you and apology from the Chairman of the Board of Directors, Nguyen Duc Tai.
"I thank the shareholders who have had enough faith to stay with MWG despite the company's many changes, but I also apologize for not delivering a profitable investment for everyone last year," Mr. Tai confided.
According to Mr. Tai, after years of comprehensive system restructuring, the company will operate efficiently this year. The company is operating in the right direction and is confident that regardless of whether purchasing power increases or decreases, "water will still flow to where it's strongest." In addition to focusing on improving services and products and boosting revenue growth, the company is also continuing to significantly reduce major costs such as logistics and store operations.
Among the dozens of questions regarding Mobile World's subsidiaries, the majority of shareholders were most interested in the business operations and divestment of capital in Bach Hoa Xanh.
"When will Bach Hoa Xanh reach a profit of 1 trillion VND?", "Does the company plan to increase its stake in Bach Hoa Xanh to 20%?", "Will Bach Hoa Xanh open more stores this year?"... these are some of the questions raised by shareholders.
In response, Mr. Nguyen Duc Tai argued that if the company wanted to sell 10-20% of its stake, it would not have finalized the 5% stake in the recent offering.
"Bach Hoa Xanh has started to become profitable and there is no reason to receive more money. If Bach Hoa Xanh reaches a profit of 1,000 billion VND, it will IPO on the stock exchange," Mr. Tai said.
According to company leaders, the recent purchase of a 5% stake in Bach Hoa Xanh by a foreign fund will not negatively impact the business but will instead increase its benefits. Specifically, the foreign investment fund will provide financial support and connect domestic and international retailers with the chain. Currently, the cash flow from this sale has begun to directly enter the company.
In the first quarter, the chain's business performance showed remarkable improvement. Bach Hoa Xanh has started to become profitable. Between now and 2025, the chain will open 100 more stores and "bring money home." In the next two years, Bach Hoa Xanh could achieve a profit of 1,000-2,000 billion VND.
In 2023, Bach Hoa Xanh's revenue reached VND 31,600 billion - the largest among similar retail chains in the market. Major partners of Bach Hoa Xanh, such as Minh Phu, Kido, CP... all acknowledge that this chain generates the largest retail sales for them.
However, when asked about the longer-term plan for the next five years for this retail chain, Mr. Tai hesitated to comment, fearing that if the plan doesn't meet shareholder expectations, they will lose confidence.
Regarding the Mobile World and Dien May Xanh chains, the company stated that they have undergone a comprehensive restructuring and cost optimization, so first-quarter profits are expected to be positive, and a detailed report will be released at the end of April. These two chains continue to be the mainstays, contributing approximately 65% of revenue and generating the primary profit for the company this year.
For the An Khang pharmacy chain, the company expects double-digit revenue growth, reaching the break-even point before December 31st. In 2024, the An Khang pharmacy chain could enter an expansion phase if it operates stably and efficiently and builds a successful business model. The Avakids chain is similar.
With its chain of stores (operating in Indonesia), Era Blue aims to become the number one electronics retailer in Indonesia this year.
Mr. Nguyen Duc Tai (far left) answers questions from MWG shareholders on the afternoon of April 13. Photo: Thi Ha
Assessing the overall market purchasing power, MWG's leadership believes that while the outlook is not very promising, there are still many opportunities for the company. With a large proportion of revenue and a significant customer base, the company has many opportunities to expand its product range, implement promotional programs, and develop sound financial solutions, helping to increase both the volume and value of orders.
In addition to dominating the offline market, the company is also expanding its online presence and is outlining competitive strategies for both methods.
This year, Mobile World Group plans to achieve revenue of 125,000 billion VND, a 6% increase compared to the same period last year, and after-tax profit of 2,400 billion VND, a 13.29-fold increase compared to the 2023 figures.
To increase shareholder value and benefits, the company will use up to 100 billion VND to repurchase outstanding shares. According to Mr. Tai, this is not a tool to prop up the share price. Regardless of whether the share price rises or falls, the company will continue this activity. The company authorizes the board of directors to decide on the timing and price of the repurchase in accordance with legal regulations and market conditions.
Thi Ha
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