During the past time, VN-Index dropped sharply to a record level with most industry groups continuously in red, retail stocks were still highly appreciated when most sessions remained in green. Even this sector’s stock is trying to “break through the top” and become the main factor supporting the indexes.
Although there was still time to be affected by the “plunging” momentum of the market, retail stocks all recorded good growth compared to the beginning of the year. Retail stocks such as MWG, FRT, and PNJ were also among the top stocks with the highest prices, and at the same time attracted a large amount of capital from domestic and foreign investors.
Whether the retail industry, more specifically the giant Mobile World, will continue to maintain a positive growth trend in the near future in the context of increasing inflation risks is a question asked by many investors. out. Sharing views at the recent talk show Money Secrets , chief economist of SSI securities company Pham Luu Hung made a cautious comment.
According to this expert, in the context of a sharp decline in the consumption of electronic products and a decrease in product prices, it will be relatively difficult for retail businesses to focus on product groups such as electronics. If the business can expand to other groups of products, it will be less risky.
Currently, for the consumer electronics segment, Mobile World has maintained its dominant position in the market with 60% of the mobile phone market share and 50% of the electronics market. When holding the majority of market share, the ability to grow for a business will be more difficult than before. Therefore, this retail giant is currently investing heavily in other areas to seek growth. Bach Hoa Xanh and An Khang are two chains promoted by Mobile World in recent times.
Recently, Mobile World also said that it will conduct a private placement of up to 20% of BHX shares in 2022-2023, showing great expectations for this chain. In a recent analysis, VnDirect securities company believes that this private placement will help Mobile World find a growth engine in combination with a better partner to implement the next development steps of BHX. such as penetrating the Northern market. It also helps to make MWG’s stock price more attractive thanks to BHX’s good valuation.
Upgrade after the pandemic
According to data from Kantar, after the pandemic, the FMCG market share of mini supermarket channels (including the Bach Hoa Xanh chain) reached 10% in 1Q2022, nearly 2.0 times higher than before the 3-4th pandemic. market share about 5-6% before May 2021. In the first quarter of 2022, the value of spending on FMCG products by mini-market channels increased by 20% year-on-year in 4 key cities and 32% in rural areas, indicating a shift to current channels. Modern day, especially the shift to mini supermarket channel, is being strongly promoted after the pandemic.
However, the revenue per store of Bach Hoa Xanh is on a downward trend. The data shows that the revenue in the first 4 months of 2022 of this chain only grew 2% year-on-year to VND 8,240 billion, but the monthly revenue per store (SSS) decreased 15% year-on-year to zero,97 billion dong. This figure is lower than the average level of 1.2 billion VND before the 4th outbreak in Vietnam.
In order to improve revenue, VnDirect believes that Bach Hoa Xanh chain is upgrading in stores. Specifically, this retail chain focuses on 3 points:
First, restructure stockpiles to eliminate inefficient products after a period of excessive inventory to serve the social distancing period as well as improve the quality control process. After a period of continuous stockpiling of goods for the peak period of social distancing due to the pandemic, BHX had to restructure its product portfolio to reduce unsuitable products in terms of quality, as well as to Reconfigure product quantities to optimize inventory management.
In an analysis report in April, securities company SSI also said that Bach Hoa Xanh had abandoned 15%-25% of SKUs (mostly SKUs that are not purchased as often as kitchen utensils), to replace with SKUs purchased more often (fresh foods) and to create a more spacious shopping environment.
In addition, MWG has cooperated with CP Vietnam to ensure quality meat in the BHX chain.
Secondly , Bach Hoa Xanh is currently upgrading its logistics system to be able to deliver fresh goods in a short time. With the explosion of online shopping after the pandemic as well as the need to build logistics systems to meet fast delivery times, especially for fresh products. Mobile World said it has focused a lot of resources to build its own logistics system, towards the commitment to bring products to customers with the fastest time and the best product quality to aim for. long-term growth.
Third , Optimizing the back-end management platform with an automatic system of forecasting goods output and determining a list of goods suitable for consumption needs, minimizing human impact in order to reduce minimize errors in customer service and is ready to accelerate the expansion of Bach Hoa Xanh nationwide from 2023.
Source: CafeBiz
Source: Vietnam Insider