MWG - Earnings beat our forecasts; BHX posts Q2 profit - Earnings Flash
  • 2024-07-30T00:00:00
  • Company Research
  • H1 2024: Net revenue was VND65.6tn (+16% YoY) and NPAT-MI was VNDVND2.1tn (+53.6x YoY), fulfilling 50% and 65% of our respective 2024 forecasts. NPAT-MI was ahead of our expectation due to (1) ICT’s EBIT margins and (2) BHX’s sales coming in better-than-expected. In Q2 2024, MWG'S NPAT-MI was VND1.2tn (+67.2x YoY; +30% QoQ).
  • TGDD & DMX’s aggregate revenue increased 6% YoY in Q2 2024, mainly driven by double-digit growth of consumer eletronics (excluding TVs) & home appliances, while phones sales grew by single digits YoY. In Q2 2024, 116 underperforming TGDD & DMX stores were closed, however, TGDD & DMX’s sales still improved 7% QoQ.
  • BHX’s monthly sales/store improved to VND2.0bn in Q2 2024 (+13% QoQ). Its sales/store improved by 6% MoM in each month from April to June, reaching VND2.1bn in June. In Q2 2024, BHX’s EBIT (and also NPAT) turned positive at VND7bn, according to our estimates from MWG’s tax loss carried forward. According to our estimate, BHX’s EBIT margin in June 2024 was positive and was the highest within the quarter.
  • Profitability: TGDD & DMX’s EBIT margin improved by 1.1 ppts QoQ to 6.7% mainly due to GPM expansion. This EBIT margin aligns with 2019’s level of 6.6%. As for BHX, its EBIT margin (and also NPM) turned positive at 0.1% in Q2 2024.
  • Other: In Q2 2024, MWG incurred a one-off expense of VND182bn, mainly due to its store closure of TGDD & DMX and An Khang. Regarding An Khang, the chain closed 45 stores in Q2 2024 and another 94 stores in July.
  • Our view: We see upside potential to our 2024 forecast for MWG, especially for BHX and TGDD & DMX, pending a fuller review.

MWG’s Q2 and H1 2024 results

VND bn

Q2 2023

Q2 2024

YoY

H1 2023

H1 2024

YoY

2024F

H1 2024 as % of 2024F

Net revenue

29,465

34,134

16%

56,571

65,621

16%

129,945

50%

  • TGDD (including TopZone)

6,682

6,671

0%

13,351

13,485

1%

29,102

46%

  • DMX

14,865

16,184

9%

28,228

30,743

9%

59,029

52%

  • BHX

7,293

10,327

42%

13,690

19,489

42%

39,309

50%

  • Others

623

952

53%

1,301

1,903

46%

2,505

76%

Online sales 1

4,421

2,244

-49%

8,216

5,750

-30%

17,290

33%

 

 

 

 

 

 

 

 

 

Gross profit

5,441

7,308

34%

10,656

14,020

32%

26,131

54%

SG&A expenses

-5,440

-5,870

8%

-10,550

-11,560

10%

-22,624

51%

EBIT

1

1,438

1638.3x

106

2,461

23.2x

3,507

70%

  • TGDD & DMX 2

388

1,533

296%

1,010

2,732

171%

3,579

76%

  • BHX 2

-305

7

-102%

-659

-98

-85%

-104

94%

  • An Khang 2

-76

-102

34%

-151

-172

14%

-272

63%

Net financial income

188

286

52%

252

496

97%

610

81%

Net other income/ loss

-60

-182

205%

-69

-188

172%

0

N.M.

NPAT-MI

17

1,172

67.3x

39

2,075

53.6x

3,203

65%

Gross margin

18.5%

21.4%

 

18.8%

21.4%

 

20.1%

 

SG&A/net sales

-18.5%

-17.2%

 

-18.6%

-17.6%

 

-17.4%

 

EBIT margin

0.0%

4.2%

 

0.2%

3.8%

 

2.7%

 

  • TGDD & DMX 2

1.8%

6.7%

 

2.4%

6.2%

 

4.1%

 

  • BHX 2

-4.2%

0.1%

 

-4.8%

-0.5%

 

-0.3%

 

NPAT-MI margin

0.1%

3.4%

 

0.1%

3.2%

 

2.5%

 

Source: MWG, Vietcap (1 Online sales are included in segmental sales presented above; 2 Vietcap estimates)

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