- We cut our target price (TP) by 9% but upgrade our rating to BUY from OUTPERFORM as the share price has declined 26% over the past two months. We believe MWG remains well-positioned to seize the growing demand for modern grocery retail from increasingly discerning consumers, notwithstanding the recent decline in its share price.  

- Our lower TP is driven by cuts in our valuations for BHX and TGDD & DMX of 18% and 5%, respectively, due to our lower near-term forecasts following worse-than-expected margins in Q3 2023. These are partly offset by rolling over our TP to end-2024.

- Higher-than-expected selling expenses at BHX cause us to temper our previous optimism for breaking even by end-2023, following a strong uplift in sales/store through 9M 2023. We now forecast a larger net loss of VND996bn in 2023F and a net loss of VND284bn in 2024F vs. our previous forecasts for a net loss of VND814bn in 2023F and a net profit of VND525bn in 2024F. 

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