Tet profit growth of 8%, not pursuing the goal of increasing gross profit margin in 2022

Mobile World Investment Joint Stock Company (code MWG) has just announced business results for the Tet season (January and February) in 2022 with consolidated net revenue of the first 2 months of the year reaching VND 25,383 billion and profit after tax (EAT). reached VND 1,077 billion, up 17% and 8% respectively compared to the high comparison background of the Tet season in 2021.

Online revenue reached more than 4,100 billion VND in 2 months, an increase of 150% over the same period and the highest level in the history of operation so far. Growth was mainly due to the breakthrough of Mobile World / Dien May Xanh (TGDD / DMX) with online revenue reaching a record of VND 4,000 billion, up 160% and accounting for nearly 19% of total sales of this chain.

As of the end of February 2022, MWG operated more than 5,420 stores, including 976 TGDD stores, 2,038 DMX stores, 22 Topzone stores, 2,122 Bach Hoa Xanh (BHX) stores, 205 An Khang pharmacies, 50 Bluetronics stores and 14 independent AVA stores.

Mobile World (MWG): New Year's profit grew by 8%, not pursuing the goal of increasing gross profit margin in 2022 - Photo 1.

In terms of chain, accumulated in the first 2 months of the year, TGDD/DMX recorded more than 21,300 billion dong in revenue, up 20% over the same period. With 839 points of sale at the end of February 2022, DMX supermini (DMS) contributed nearly VND 2,000 billion, double the revenue of the same period. DMS has proven to be an effective business model that helps MWG continue to increase its market share in remote and isolated areas.

Topzone opened 11 more AAR model stores and 1 new APR independent store in the first two months of the year, bringing the total number of points of sale to 22 and presence in 15 provinces. After Topzone opened more stores in the provincial market and went into stable operation, the average sales of each store reached 8-10 billion VND/month.

In January, MWG also tested 12 independent retail stores: Mother & Baby products (AVAKids); sportswear (AVASport); fashion (AVAFashion); At the same time, deploying shop-in-shop business: jewelry (AVAJi) at TGDD store and bicycle (AVACycle) at DMX store.

Due to the opening on the occasion of Tet, the AVA chain’s points of sale contributed more than 100 billion dong in revenue in the first 2 months of the year. With positive initial results, AVAKids was selected to test phase 2 at the scale of 30-50 stores to continue to evaluate business performance.

In the first 2 months of the year, An Khang drugstore chain recorded 3 times sales over the same period. An Khang is focusing on building a new – more upgraded business model for strong replication in the near future.

Focusing on increasing sales volume has a short-term impact on BHX’s profit margin

In the first 2 months of the year, BHX recorded accumulated revenue of VND 3,900 billion, approximately the same period last year. Since the end of February, BHX started implementing big changes such as attracting customers with extremely attractive pricing strategy even compared to traditional channels and efforts to only sell new products during the day to make food fresh. living becomes the destination of BHX.

In addition, BHX also implemented a new layout for the group of supermarkets opening in 2022 (signed premises or under construction from the end of 2021), focusing on improving the shopping experience of customers. through creating comfort, ventilation, convenience and helping customers easily search and be more interested in product selection.

In addition, this chain will streamline customer service from the first touch point to the moment the customer leaves the store. Apply practical solutions in the division and arrangement of goods, handle cashier counters and apply technology to simplify store operations, reduce the risk of errors when serving customers, and significantly reduce Workload for employees.

BHX expects these changes to be replicated and gradually reflected in business results from the second quarter of 2022. In March, the chain started to record positive signals when the number of customers (traffic) and the volume of fresh goods sold nearly doubled compared to the average of the first 2 months of the year.

Due to the application of many promotions, March’s revenue will increase less than the volume increase, but it is expected to still grow positively over the same period and return to pre-epidemic levels in 2021.

The fact that BHX focuses all resources to attract customers and boost sales volume will affect the profit margin of BHX in particular and of MWG in general in the short term. However, the company considers this to be a necessary investment for the chain to develop sustainably in the future.

In 2022, MWG’s overall strategy is to optimize purchasing capacity and invest in activities to promote sales, take care of customers, and upgrade shopping experience. Since then, the company has achieved revenue and profit growth through expanding customer base, increasing shopping volume and sales volume, without setting a target to increase gross profit margin.

In addition, MWG continues to show its ambition to “capture” the Indonesian market with a strategic cooperation with Erajaya Group to establish a joint venture PT Era Blue Elektronik (Era Blue). The goal of the joint venture is to develop the number 1 electronics retail chain in Indonesia and list this company in the next 5 years. The first Era Blue store is expected to open to consumers in mid-2022 in Jakarta.

Era Blue Joint Venture marks an important step in MWG’s overseas development strategy and is expected to make a positive contribution to prolonging the growth chain in the future. The resonance between the strengths of the two sides is expected to help Era Blue shorten the time to realize its vision of becoming the dominant retailer in the Indonesian market. gop-nam-2022-20220328101117214.chn gop-nam-2022-20220328101117214.chn

You are reading the article Tet profit growth of 8%, not pursuing the goal of increasing gross profit margin in 2022
at – Source: – Read the original article here

Back to top button