Mobile World President: Loss is unthinkable, every day wondering why stock prices plummeted

Tram Ho

If calculated from the beginning of the year, MWG shares of Mobile World Investment JSC dropped by 50.6% from VND 114,000 / share to VND 56,300 / share. The share price plummeted in part due to the news that an employee of the Bach Hoa Xanh store in Da Nang was positive for Covid-19, and MWG was forced to close a branch in Da Nang and to isolate many employees to prevent it. outbreaks. The Government’s dispatch required social isolation, suspension of non-essential service shops, causing many investors to worry that MWG will have cash flow problems when the rental cost is very high. while the output plummeted.

Chủ tịch Thế giới Di động: Lỗ là điều không tưởng, mỗi ngày đều tự hỏi sao giá cổ phiếu giảm mạnh - Ảnh 1.

MWG share price in Q1 / 2020

Before that situation, the MWG leadership organized an online meeting via Zoom platform, and answered most of the investor’s questions. Contrary to the initial concerns, MWG’s leaders were quite confident and stated that, although the disease is something no one wants and has a strong impact on the life of the whole society, but in some ways, it is open. launched a new opportunity for Bach Hoa Xanh, the company’s food supermarket chain.

Mr. Nguyen Duc Tai: If the market is considered as a bicycle race, MWG is confident in the top of the first place

No less than 3 times, MWG Chairman Nguyen Duc Tai emphasized to shareholders of the Covid-19 epidemic this time is an opportunity to screen, those businesses with a “good” background (in the original way of using Mr. Tai). – pv), solidarity and technology-based team will surely cope with the disease and continue to grow. “If you consider the market to be a bicycle race, MWG believes that you will be the leader in the first group to finish.

Chủ tịch Thế giới Di động: Lỗ là điều không tưởng, mỗi ngày đều tự hỏi sao giá cổ phiếu giảm mạnh - Ảnh 2.

Design: Huong Xuan

There are 5 reasons given by Mr. Tai to assert his confidence:

Firstly, the scripts were prepared and the company was not passive. When the disease is complicated, the company will activate the plan at that level.

Secondly, in terms of business plans, according to Mr. Tai, the company’s general orientation is not to stimulate demand, so this stage the company will focus on cost control and availability of platforms so that when the epidemic ends MWG will be the first to rise first to run to the future.

Thirdly, in this period, priority is given to ensuring business cash flow, so long-term and expanded investment projects will be postponed.

Fourthly, this is an opportunity for BHX to develop and build consumer confidence in the retail sector. The company believes that the housewives used to go to traditional markets when they were sure that there were sufficient sources of goods near their homes, stable prices, and good service attitude. new that normally would cost a lot of money to entice them from familiar shopping places to BHX. “This is a natural opportunity,” Tai remarked.

Fifthly, this epidemic will certainly affect people’s income, the total demand of the whole society will decline sharply but there will also be many sellers giving up, and the supply will also decline. decrease accordingly. “The issue of who stays in the end will win the market share that others leave, which is important. So far in the retail sector, many talented people have gone. , and their market share is the main driver of MWG, that’s why MWG’s market share has been increasing continuously over time, “Mr. Tai confidently shared with shareholders.

“What this company wants is that in any situation it can increase its market share and be the healthiest in the retail industry. If the market goes up 5% then we will increase 20%, and if the market If we reduce by 20%, MWG only drops 5-10%, that’s what we are aiming for. But forecasting the market is too difficult in this period, “Mr. Tai said.

Holes are unthinkable

According to Tai, the breakeven point of Mobile World (Mobile World) and Green Electronics (DMX) shops is very low. “That’s why many trillion dong of profit is there,” “I don’t believe the revenue will drop below the break-even point, because according to the company’s calculations, the break-even point of DMX was 5 billion, but That is when the shop has to bear 100% of the cost of renting premises and labor, while those costs have been reduced, the capitalization point is only about VND 2-3 billion. If 15 billion, if 1-2 billion fell, he did not believe that day, it seems a bit too much science fiction, “Mr. Tai shared with investors.

According to Mr. Tai, all costs are variable costs. Including expenses such as labor, rent costs should be included in fixed costs but the company can cut down, turning the fixed state into dynamic according to the business situation. In particular, the company is negotiating with landlords to reduce rent by 50% or free rent during the closing time as required by the state authorities. If the partner is too rigid, the company will consider paying the ground and renting it in a nearby location at a more reasonable cost.

This is a once in a lifetime opportunity to increase ownership

Chủ tịch Thế giới Di động: Lỗ là điều không tưởng, mỗi ngày đều tự hỏi sao giá cổ phiếu giảm mạnh - Ảnh 3.

Design: Huong Xuan

When asked why stock prices have plummeted in recent years, Mr. Tai said, “This is a question I ask myself, in the end I feel that individual investors answer this question best because they’re the ones who made the decision to cut losses, if you believe then buy it, and if you think this business only has a shell then sell it out. you”.

Mr. Tai shared, the internal shareholders’ registration to buy is yes and he personally feels that “this is a once-in-a-lifetime opportunity to increase the ownership ratio. The difficulty is to identify which enterprises have foundations” It is often said that at this stage, the slow giants will be seriously hurt by the fixed costs, but he said that MWG is a big business in the past. sales are still rising, profits are still rising and MWG is not a slow-growing obesity, that’s why the board of directors registered to buy, not for fun, to register to buy, not to scare you “.

However, he denied that the company would bring money to buy treasury stocks, although he said that “if there is money left, buy it because there’s no such exciting time”. Although the company still has many trillion dong in the bank, to ensure cash flow for business and the company still has to borrow short-term to finance inventories. Therefore, borrowing more money to buy treasury stocks is not a healthy financing.

The company also denied that it would M&A other chains, saying that “the morality did not work very well during this period”, and would take the time to reform the purchased ones. Last year MWG did M&A Tran Anh and the deal “cost a lot of money”.

Mobile World & DMX: Closed 10% but sales “did not decline as expected”

Chủ tịch Thế giới Di động: Lỗ là điều không tưởng, mỗi ngày đều tự hỏi sao giá cổ phiếu giảm mạnh - Ảnh 4.

According to Tai, what is happening in the whole world has never been experienced, but it gives him a great confidence. Before the outbreak of the disease, he thought that mobile phones were luxury goods but actual sales in recent days were “not declining as expected”, meaning that there was still a class of consumers who considered phones. , essential computer electronics available. For example, sales of rice cookers have increased, laptops have increased, and phones have to be broken down to buy new phones. Perhaps there is a decrease in demand from those who prefer to buy new products, but these objects are not many while the replacement demand is still present.

Doan Van Hieu Em, CEO of Mobile World and DMX chain, said during the season, some groups of goods increased such as refrigerators, tablets, laptops increased 200% compared to the normal sales month. “The target this year will sell about 250,000 laptops, the first 3 months of the year has reached 40% of this.” And the number of customers who buy installments is more than before because the market is more difficult.

Mr. Hieu Em also said that about 10% of TGDD and DMX shops closed, mostly in Hanoi at the request of authorities to prevent epidemics. The impact of this closure is yes but during the closing time, TGDD and DMX still deliver online. “Sales in February were still growing, sales in March went down but not so much overall. The company halted plans to expand during the season, but it was only delayed, not canceled.”

The company said it is always ready to have the plan to speed up the outbreak. Supply is not a problem because the majority of purchases from domestic suppliers. Some accessories and household goods are imported abroad, the supply is quite stable because factories in China are operating again. Concerned that the products were out of stock due to inventory, Mr. Hieu said that because MWG is a big partner, it has good support from the company to sell these products quickly.

Bach Hoa Xanh: From being a burden, becoming a salvation again in the epidemic season

Chủ tịch Thế giới Di động: Lỗ là điều không tưởng, mỗi ngày đều tự hỏi sao giá cổ phiếu giảm mạnh - Ảnh 5.

Previously, when MWG just opened the Department Store, many investors worried that this chain would be a burden for the company because most food retail supermarkets lost money. However, according to Mr. Tran Kinh Doanh, General Director of MWG, looking back on the progress of the BHX chain in the last 2-3 years, it is evident that the rapid expansion of the daily chains, the revenue on the top of the shop and the gross margin have increased. . Currently the company is focusing on expansion so it has not focused on cost control. In 2020, BHX will open 700-1,000 new shops and “this situation may reach the mark quite soon”.

“Thanks to” Covid-19, BHX orders in March soared from 12 million to 17 million, each shop increased from an average of 500 to 600-700 turns.

According to Tai, this disease is not good for anyone but only real gold can test fire, is the mechanism to screen businesses with real foundations and businesses with only the outer shell. Outsiders saw MWG “plugged in,” but people didn’t know that it took us 3 years to build a lot of things behind in order to run smoothly. If you imitate without building a solid foundation, it will just be like building a castle on the sand, the bigger the wind, the greater the risk of falling.

Even in the worst case of disease, MWG leaders said that the demand for rice, meat, and fish is an indispensable need and that food demand movements will be protected. According to the Chairman of MWG, recently, the official letter of the Ministry of Industry and Trade allowed the trucks of necessities to run during peak hours to serve the increased demand and maintain the lives of people. . The government prioritizes the supply of essential goods to people through models such as BHX.

According to Mr. Tai, the bottleneck of BHX is not currently in the shipper system, but in distribution centers (DC). Currently the DCs are at full capacity, BHX has added 1,000 delivery staff to the warehouse. The goal of MWG is to build more DCs in the provinces, which previously required a 20,000m2 DC to maneuver 7,000m2.

The company does not want to lose any employees at this stage

When asked about the reduction in personnel, Mr. Tai said, “Absolutely cutting staff is not. I know the disease will pass, human resources are precious, I have worked hard to screen. put the customer culture in their minds and they’ve lived with it for years, so the company doesn’t want to lose any employees at this stage, we’re trying to keep infantry, because only a few months after this resource helped the company expand its boundaries, it did not advocate reducing people. ”

To ensure the work, MWG transfers resources between chains, the company works with the authorities to apply for postponement / reduction of social insurance premiums, and adjust the employee hours at the store according to revenue. reality.

Mr. Tai acknowledged that in order to ensure resources at this stage, the employees’ income will be reduced. Previously, you worked 208 hours / month and received a full salary. At present, you have to stay at home for 2 weeks, definitely reduce your income. But besides that, when at home, the demand is less, spending is also reduced.

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Source : Genk