MWG stock on the rise, FRT trending down
MWG stock on the rise, FRT trending down
FPT Retail’s (code: FRT) efforts to expand the Long Chau drug store chain may not be enough to balance out the performance of its stocks that hit rock-bottom since the initial listing.The stocks of MWG stock maintained good growth while FRT has been slipping for more than a year now
While FRT is having issues. , its competitor Mobile World Group (code: MWG) keeps reporting good performance thanks to diversifying its business lines instead of focusing on drug stores like FRT. MWG’s 2018 revenue was VND85.516 trillion ($3.72 billion), 5.7 times as much as FRT’s.
In 2019’s first nine months, MWG’s performance spiked with VND76.763 trillion ($3.34 million) in net revenue, up 17 per cent on-year and VND2.976 trillion ($129.4 million) in after-tax profit, up 36 per cent on-year. Thanks to the positive results, investors show great interest in MWG stock and prices have been skyrocketing despite the generally unfavourable market.
On the other hand, FRT has been showing signs of weaker growth with VND12.427 trillion ($540.3 million) in net revenue, up 13 per cent on-year and VND230 billion ($10 million) in pre-tax profit, slightly up 1.1 per cent on-year during the same time.
FRT, once a “hot” stock on the OTC stock exchange, has been in a nosedive since last April. It is currently traded at around VND40,000 ($1.74) per stock, only half of its peak price more than a year ago.
In recent years, MWG has expanded to the other business segments like home appliances (Dien May Xanh chain), food and grocery (Bach Hoa Xanh chain), and pharmaceuticals (An Khang chain). Renewing itself by opening many kinds of business has helped MWG maintain growth despite the smartphone market reaching its saturation point.
As of the end of September, MWG owned 1,038 thegioididong stores, 737 Dien May Xanh stores, and 409 Bach Hoa Xanh stores. During the first nine months of the year, Bach Hoa Xanh contributed VND2.8 trillion ($121.74 million) in revenue to MWG, making up 3 per cent of the company's total revenue.
FRT's main revenue still comes from the smartphone business, where it has a smaller scale of 584 stores. FPT Retail has been carrying out new strategies like the partnership with home appliance retail chain Nguyen Kim to selling electronic products, or the one with local cross-border platform fado.vn to boost online sales. However, the partnerships cannot replace smartphones as the main business line due to their small scale.
The bright point now may be the Long Chau drug store chain which could seize opportunities in a fragmented market. Currently, Long Chau stores number 50, and this is expected to reach 70 by the end of this year.
According to information published at the recent meeting with FRT’s investors, Long Chau is forecast to boom in 2020 and 2021 with the number of stores expected to hit 270 and 470, respectively. The chain will contribute VND500 billion ($21.74 million) to FRT’s revenue in 2019 (2.8 per cent) and VND1.9 trillion ($82.6 million) in 2020 (9.3 per cent ), and VND4.4 trillion ($191.3 million) in 2021 (18.4 per cent).
