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Top 3 of retail and consumer businesses is recommended investment, Mobile World Group No. 1, enterprise No. 2 quite unexpected

Tuesday - 28/08/2018 21:43
The transformation of the Bach Hoa Xanh department initially recorded positive results. With strong business results in the first 7 months of 2018, revenue growth was 41% and 39% respectively
Quarter 1/2018 is the period when the stock market has the strongest growth in the last 10 years due to foreign cash flow. Move to the second quarter, the market is under pressure from the adjustment of the market price and pressure from the banking industry, plus the impact of the Fed increasing interest rates, trade war lead to foreign investors triggered a net sale..

MB Securities Joint Stock Co (MBS) forecasts that in the third and fourth quarters, foreign capital flows will return, thanks to positive business growth and stable macroeconomic situation.

While the market is in a difficult and potentially risky phase, smart cash flow is picking up in favor of base stocks that have their own growth story.

Consumer goods and retail is one of the potential investments in 2018, according to MBS. In particular, MBS recommends buying 3 stocks: MWG, PNJ, and DGW.

Mobile World Group (MWG)
Target price: VND 140,000 / share
Top 3 DN hàng bán lẻ, tiêu dùng được khuyến nghị đầu tư, Thế giới Di động đứng số 1, DN số 2 khá bất ngờ - Ảnh 1.

Updates on the business situation in the first 7 months of 2018 of the Mobile World show that this company is in strong growth, reaching 51.7 trillion dong of net revenue and nearly 1,800 billion dong of after tax profit, growing respectively at 41% and 39% over the same period.

Mobile World Group possesses good financial health accompanied by sustained growth. The average revenue growth rate is about 63% per annum and net profit is about 71% per annum for 2013 - 2017. Its capital structure is safe.

MBS analysis: Dienmayxanh.com will be the growth driver for MWG in the period 2018 - 2019. Dienmayxanh is expected to increase market share to 45% in the next two years, from the current market share of 35%.

In addition, Bach Hoa Xanh Department has the change, initially recorded positive results. On average, each store has revenue of 850 million dong per month. The number of stores by the end of June was 384.
Digiworld - DGW
Target price: 34,400 dong / share
 
Top 3 DN hàng bán lẻ, tiêu dùng được khuyến nghị đầu tư, Thế giới Di động đứng số 1, DN số 2 khá bất ngờ - Ảnh 2.

With the strategy of adding value-added services and after-sales service to mobile phone manufacturers, MBS believes that Digiworld will continue to improve the results. business in the future.

DGW posted a quarter-on-quarter growth with net sales of around VND1,376 billion in the second quarter of 2018, up 74% year on year, with the mobile sector contributing the most to the distribution. . Thanks to the positive growth of the smartphone market, Xiaomi quickly increased its market share in Vietnam and contributed greatly to Digiworld's business results.

The market development service (MES) model is bringing high efficiency. In short, MES has given the mobile sector a fast growth, while solid steps in the consumer and healthcare sectors will be the driving force for long-term growth.

Although MBW's target price is only VND29,900 / share, SSI expects the price to be around VND34,400 / share.

SSI reported net profit of shareholders of DGW increased 43.6% over the same period, up to 41.6 billion. Regarding the market prospects of the business sectors of DGW, SSI recognizes:

Mobile phone segment: The mobile phone market is nearing saturation on the basis of data on total telephone sales in the first 6 months of 2018 only 3.9% over the same period (according to GFK data). ). This is in stark contrast to double digit growth over the past few years. However, Xiaomi accounts for most of DGW's mobile phone sales, so SSI estimates that the mobile phone revenue of DGW will improve along with the growth of Xiaomi in the Vietnamese market.

Xiaomi has an ambitious goal in Vietnam, with a 10% market share of mobile phones in 3 years.

Office equipment segment

DGW is distributing products for many famous brands such as HP, Asus, Dell, Lenovo, Acer, LG, APC, Logitech, Microsoft, IBM, Schneider, Phillips and Eaton. Sales of office equipment averaged 24.3% per year, from VND315 billion in FY2013 to VND752 billion in 2017 corresponding to an increase in the number of products. The company plans to grow 30% per year in this segment in the coming years.

FMCG & Healthcare

With experience in the distribution industry along with the cooperation with the network of major distribution channels, including: (1) Traditional store channels: 5000 pharmacies, 877 supermarkets and 22,000 stores in the FMCG segment.

(2) Online sales channels: Lazada, Tiki and other channels. Therefore, we believe that market expansion services provided by DGW will attract many brands with high quality products but lack the skills to expand the market to cooperate with DGW to grow faster. According to the management of DGW, in the long term, DGW plans to generate revenues of 5,000 billion dong from FMCG and healthcare.

"DGW has a positive net profit outlook of 40.4% over the same period in 2018 and at least 27.0% higher than the same period in 2019, so we think that the stock DGW At PE of 10x, the target price is 34,400 dong / share, a 35.7% increase compared to the current price, "SSI reported.

Phu Nhuan Jewelry Joint Stock Company (PNJ)
Target price: 134,000 dong / share
Top 3 DN hàng bán lẻ, tiêu dùng được khuyến nghị đầu tư, Thế giới Di động đứng số 1, DN số 2 khá bất ngờ - Ảnh 3.

MBS believes that its business activities remain stable with a great competitive advantage while the potential of the jewelry retail sector remains, indicating that in the medium and long term, PNJ still has positive growth potential.

PNJ's 1-H FY2011 business results are quite satisfactory with 34% revenue growth and 37% net profit.

Demand for gold jewelry increases at an average annual growth rate of 10% in the period 2013 - 2017. In the first half of 2018, the demand for jewelry gold in Vietnam has increased by 14%. At the same time, market gaps are good for jewelery chains to increase market share with outstanding gains as the proportion of mom & pop retail stores remains high at 80%.

According to the analysis of Viet Capital Securities (VCSC), PNJ Watch will be a plus for PNJ with plans to open 4 stores in the second half, targeting customers similar to jewelry. Observing the products on PNJ's web site, VCSC found that most watch products were priced at less than $ 1,000, in the upper and lower end segments; and the ratio between the male and female clocks is 60/40, which is quite understandable when PNJ can cross-sell this product to its existing customer group.

Source: Cafef - Translated by WwW.CoPhieuViet.com:

 Tags: PNJ, MWG, DGW

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