INVESTOR RELATIONS

MWG recorded 1H18 net revenue of 44,5 trillion VND, increase by 13,3 trillion VND, equivalent to 43% growth compared to the same period last year; 1H18 net profit after tax of 1,5 trillion VND, increase by 500 million VND, equivalent to 44% growth compared 1H17. The online revenue reached 5,5 trillion VND, more than doubled revenue of the same period in 2017. All net revenue, net profit after tax and online revenue are on track to achieve the company’s annual targets for FY2018. In terms of revenue breakdown by category, phones, tablets, laptops and accessories were accounting for 55% of MWG’s net revenue; following by electronics, white goods and small appliances with 40%. Grocery & FMCGs contributed for 3% of the net turnover and the remaining 2% was belong to other services. In 1H18, the total Vietnam retail sales value of phones and tablets recorded 4% YOY growth while MWG achieved 20% YOY revenue growth for these products, equivalent to approx. 5 times of the overall market value growth. This strong performance reflected in the increase in market share. MGW’s market share of phones and tablets reached 45% in 1H18 compared to 40% in 1H17. MWG targets to reach approx. 50% from 2020 onwards. Almost Thegioididong stores were closed in 1H18 for conversion into Dien May Xanh mini in order to further exploit revenue potential. The stores selected for conversion were located in area with high population density, good traffic and had opportunity for expansion. For example, a Dien May Xanh mini requires area of 350-500 sqm, if there is a chance to convert a Thegioididong store at 150sqm to Dien May Xanh mini, the company only needs to rent additional 200-350 sqm and the shop can be expected to increase to doubled revenue in a short period. Besides the additional rental fee, these converted shops incurred insignificant increase in other overheads to generate that high turnover. Hence, MWG will opportunistically continue this trend. According the MWG’s analysis based on GFK data of 1H18, out of 100 phones and tablets sold in Vietnam, 84 products were sold in physical stores and 16 products were sold via online channels. In 84 products sold offline, 36 products were sold in MWG’s chain (not only Thegioididong stores), equivalent to offline market share of 43%. In 16 products sold online, 9 products were sold via MWG’s websites (not only thegioididong.com), equivalent to online market share of 55%. In consumer electronics retail business (including electronics, white goods and appliances), the total Vietnam 1H18 retail sales value rose by 28% compared to the same period last year while MWG achieved 90% YOY revenue growth for these products, equivalent to approx. 3 times of the overall market value growth. In terms of market share, MWG reached 35% in 1H18, considerably increased from the level of 23% in 1H17. Dien May Xanh may continue to open up to 100 stores to add approx. 10% market share from 2020 onwards. This target of 45% market share in consumer electronics retail is a challenge for the company since 10% is equivalent to the market shares of the 2^nd well-established player in Vietnam. However, MWG believes that this target is still achievable given nearly 40% market share being served by mom-and-pop stores. Moreover, consumer electronics in Vietnam is expected to growth with 2-digit rate in coming years due to the low penetration of white goods in Vietnamese households, potential increase of consumer electronics products owned by a household and a replacement demand of high-tech products thanks to the increase in disposable income per capita. Regarding the online/offline market share of electronics and white goods, out of 100 products sold in Vietnam, 95 products were sold at physical stores and only 5 products were sold via online channels. This situation is due to the high-value of electronics and white goods in comparison to Vietnamese people’s income, hence the customers prefer to experience the real products at the stores before making purchase decision rather than online shopping. In addition, these products are usually related to complicated delivery and installation services compared to phones and other FMCGs. In 95 products sold at stores, 34% offline market share belonged to MWG’s chains. In 5 products sold online, 45% products were sold via MWG’s websites. Following the proven successes of Thegioididong and Dien May Xanh, Bach Hoa Xanh which is still in refining winning formula process is expected to become the new pillar for MWG’s sustainable development in long-run. Due to the strategic change in choosing store locations since April this year, average turnover per store has been improved positively. With 384 stores and more than VND350 billion total revenue by end of June 2018, the average monthly revenue per store having at least 30 days in full operation exceeded VND850 million. In terms of revenue breakdown, 35% of the total revenue was contributed by fresh products, 50% sales value came from other foods and drinks and the remaining belonged to home- and personal-care products. Thanks to the recent impressive revenue records of new concept – large store up to 300sqm and the stores established in neighboring provinces as Long An and Binh Duong, MWG strongly believes that Bach Hoa Xanh is on track to achieve EBITDA break-event at the store level by year end and will scale up to the whole country in the near future.