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MWG Update – OUTPERFORM
05/03/2025 - 5:12:29 CHMOBILE WORLD INVESTMENT CORP (MWG VN)
The company ended 2024 with 13.6% YoY growth in net revenue and 22-fold YoY growth in EAT, largely thanks to a rebound in TGDD & DMX’s results and BHX starting to make profit. Looking ahead, the EAT is forecast to uphold vibrant growth of 28% YoY in 2025, predominantly driven by BHX’s contribution. We maintain an OUTPERFORM recommendation for the stock at a target price of VND68,500/share by the end of 2025 (2% lower than the prior update).
MWG announced (unaudited) net revenue at VND134,341bn (+13.6% YoY) and EAT at VND3,733bn (+22-fold YoY) in 2024, making a dramatic recovery from dim 2023, meeting 99% and 96% of our projections. The surge in EAT came as a result of advances in gross margin, the SG&A expenses to net revenue ratio and financial profit.
TGDD & DMX, still responsible for 67% of MWG’s top line, reported 7.3% YoY revenue growth irrespective of a diminution in the number of stores to eliminate underperforming ones.
BHX was in the limelight for achieving profitability from 2Q2024. Making up 30.6% of MWG’s sales, the chain generated a 30% YoY upturn in sales in 2024, fueled by a growth stream in monthly revenue per store since early 2023 (despite this low base effect fading out toward the year-end). It has resumed opening new stores, with plans to speed up in 2025 but concurrently meet criteria on efficiency.
An Khang, whose contribution to MWG’s sales remains negligible (c.2%), put a priority on boosting revenue per store and optimizing operations. The closure of underperforming stores was also carried out to fortify efficiency.
Contribution from the joint venture Era Blue was a loss of VND45bn on the whole year basis, including the first modest profit in 4Q.
Outlook: For 2025, we project that the company may deliver VND145,314bn of net revenue (+8.2% YoY) and EAT of VND4,783bn in 2025 (+28.1% YoY), underpinned by BHX’s full-year earnings contribution and expansion of store network, though TGDD & DMX remains the key earners. Our target price for MWG by the end of 2025 is VND68,500/share, equivalent to a total return of 15.7%.
