MWG Update – OUTPERFORM

MOBILE WORLD INVESTMENT CORP (MWG VN)

The company continued to generate rosy growth of 41.4% YoY in EAT in 2Q2025, stronger than our expectations, fueled by strengthened operational efficiency in all key chains. We revise 2025 EAT projection for MWG up by 26% to VND5,984bn (+60.3% YoY) and move target price to YE2026 at VND83,200/share, equivalent to a 16.6% total return. Rating OUTPERFORM.

MWG posted net revenue at VND37,620bn (+10.2% YoY) and EAT at VND1,658bn (+41.4% YoY) in 2Q2025. The cumulative growth achieved 12.4% YoY and 54.4% YoY, to VND73,755bn and VND3,205bn, respectively, in 1H2025.

The leap in EAT was driven by heightened efficiency following store network restructuring, with the SG&A-to-net revenue ratio improving on flat SG&A expenses in 1H. Also, financial profit jumped by 45% YoY, giving the bottom line an extra push.

TGDD & DMX witnessed 11.9% YoY revenue growth in 1H2025. They together accounted for 67% of MWG’s top line and remained the earnings mainstay thanks to elevated profitability from a streamlined store network.

BHX posted a 16.6% YoY revenue growth and accelerated the expansion of store network. It is reported to generate better QoQ efficiency in 2Q2025 though earnings figure was not disclosed.

Contribution from the joint venture Era Blue was a profit of VND11bn in 2Q2025, compared to VND3bn in 1Q, with 28 new stores opened YTD.

IPOs for the chains are planned by 2030. In the meeting on Aug 8, 2025 with strategic investors and stakeholders to discuss development vision through 2030,  MWG’s management outlined four key focuses to facilitate TGDD & DMX growth, comprising i) growing by “quality” (accompanied by such measures as offering excellent services rather than cheap prices, changes in paying staff incomes – which is tied with sales performance, fostering “familyship” culture with partners, etc.) to further optimize the current system rather than opening more stores, ii) providing life-time services for products, iii) deploying loyalty app as a super app operating like an e-commerce platform with better services, and iv) expanding to other geographic regions (e.g. EraBlue in Indonesia). The company plans to implement IPO for these chains by 2030.

For BHX, it still underlines providing sufficient goods items with safety and high quality, in tandem with quick and easy shopping experience. The management also expresses hopes to implement IPO for BHX in 2028.

For 2025, we project that the company may deliver VND148,543bn of net revenue (+10.6% YoY) and EAT of VND5,984bn (+60.3% YoY), 2% and 26% higher than our prior projections, respectively. Our target price by 1H2026 is VND83,200/share.