Leading Vietnam retailer Mobile World targets 14-fold increase in after-tax profit

Mobile World Investment Corporation (MWG) has set 2024 revenue and after-tax profit targets of VND125 trillion ($4.99 billion) and VND2.4 trillion ($95.86 million), up 6% and 14.2 times year-on-year, respectively.

A leading retailer in Vietnam, MWG revealed the targets Saturday at its annual general meeting of shareholders (AGM).

It also said that it had earned VND31.5 trillion ($1.26 billion) in revenues in the first quarter of this year, up 17% year-on-year.

The board of directors said Mobile World (mobile phones) and Dien May Xanh (electric and electronic home appliances) will continue to be the corporation’s main profit pillars this year, contributing about 65% to the firm’s revenue.

The Bach Hoa Xanh food and consumer goods retail chain is expected to contribute about 30% of the corporation’s revenue, enjoy a double-digit revenue growth, increase market share, and start earning profits.

MWG’s An Khang pharmacy chain and AVAKids - a retail chain of mother and baby products - will also enjoy double-digit revenue growth and break-even this year, the AGM heard.

Its Erablue – an electronics chain in Indonesia – is set to record double-digit revenues, increase market share and become the top electronics retailer in the 300-million-strong country.

The corporation said it had no plans to expand the Mobile World and Dien May Xanh chains in the next few years. Chains yet to make a profit, like Bach Hoa Xanh, An Khang, Avakids and EraBlue, will be expanded selectively after they enter a period of stable and effective operations.

Chairman Nguyen Duc Tai commented that 2024 would be a good year for the corporation with Bach Hoa Xanh entering a new phase. The Mobile World and Dien May Xanh chains are going through great changes, he said, adding that once they fix their weaknesses and maintain market share, profits will return.

On other chains, Tai said An Khang was a challenge for the corporation as it is yet to find a business model capable of attracting a lot of customers.

“It may take MWG a few more months, or even the whole of this year, to find the right model for this chain,” he added.

He said the management has a strategy to make Avakids the leading online channel in the mother & baby industry. In case the new direction does not prove effective, MWG will close Avakids, Tai added.

Even though MWG's profit plummeted in 2023, the board of directors still plans to pay a 5% cash dividend, equivalent to VND500 ($0.02) per share.

The corporation also presented an Employment Stock Ownership Plan (ESOP) 2024 with a maximum issuance rate of 2% of the total outstanding shares.

Chairman Tai said that the corporation will spend VND100 billion ($3.99 million) this year to buy back shares. This move was aimed at increasing share value for shareholders, he added.

MWG closed Friday at VND52,000 ($2.08) per share.