Mobile World Investment : YTD March 2022 Report

OVERVIEW OF YTD MARCH 2022 PERFORMANCE

NET REVENUE

(VND billion)

2022 Net revenue target of

VND 140,000 billion was completed

3M2021

3M2022

NET PROFIT AFTER TAX

(VND billion)

2022 NPAT target of

VND 6,350 billion was completed

3M2021

3M2022

MWG's top and bottom line continued to grow YoY. Revenue in Q1 2022 hit the new record and NPAT slightly slid compared to the peak result in Q4 2021

1,339

1,445

THE KEY HIGHLIGHTS

Total revenue of TGDD, DMX and Topzone bounced by 21% YoY, of which:

DMX supermini surpassed VND 2,700 billion, doubling the sales in Q1 2021

29 stores contributed revenue of VND 470 billion in Q1 2022

In March 2022, revenue of BHX increased by 10% YoY and recovered to the level before the pandemic breakout.

BHX cooperated with C.P. Vietnam offer the customers products with traceable origin, freshness and hygiene, in good-quality with attractive selling prices.

YTD online sales reached

VND 5,935 billion

+138% YoY

211 pharmacies by the end of March

3,7x sales in Q1 2021

1

DETAILS OF YTD MARCH 2022 PERFORMANCE

• • For the first 3 months of 2022, MWG recorded a consolidated net revenue of VND 36,467 bn and net profit after tax (NPAT) of VND 1,445 bn. Online revenue was VND 5,935 bn YTD (+138% yoy) and making up approx. 16% of the total sales. With this results, the Company fulfilled 26% of the revenue target and 23% of the NPAT target.

• • YTD revenue hit the record high, up 18% YoY and 2% QoQ. This quarter has the 2nd highest NPAT that increased 8% from the very high base of the Q1 2021. Comparable to the NPAT record high level seen in Q4 2021, the bottom line of MWG slightly slid while other industry players see negative growth of 30%-40%. The net margin was approx. 4%, properly reflecting the Company's strategy to proactively prioritize campaigns for drawing traffic and boosting sales volume of BHX.

• • By the end of Mar 2022, MWG operated more than 5,497 stores, including 985 TGDD, 2,077 DMX, 29 Topzone, 2,127 BHX, 211 An Khang pharmacies, 44 Bluetronics and 24 AVA independent stores.

• • For the first quarter of 2021, TGDD and DMX achieved over VND 30,000 bn revenue (+21% yoy). Of which:

  ➢

  With 874 stores by Mar-end, revenue of DMX supermini (DMS) surpassed VND 2,700 bn, doubling sales in Q1 2021. DMS continues to be the main growth driver for DMX.

  ➢ Topzone had 28 AAR and 1 APR points of sale, contributed almost VND 470 bn in 3M2022.

  ➢ Online sales recorded more than VND 5,700 bn (+150% yoy), accounting for nearly 19% of the aggregate sales of TGDD and DMX.

• • For BHX, the chain recorded YTD revenue of VND 6,040 bn, rose 2% YoY and 8% QoQ.

  • ➢ The Company aims to turn BHX as the top-of-mind destination for fresh foods shopping. Hence, this chain implemented many activities and promotions to draw traffic and encourage customers experience the recent improvements. These actions will temporarily affect BHX's revenue and profit margins in short term, but are essential investments for BHX's repositioning strategy.

  • ➢ In March, the consumption of fresh products almost doubled and traffic surged by nearly 40% versus Jan-Feb average. Although applying many discounts, the sales in this month was also back to the level before the pandemic breakout and up 10% compared to the same period last year. In April 2022, BHX has cooperated with C.P. Vietnam to offer the customers products with traceable origin, freshness and hygiene, in good-quality with attractive prices even as competitive as traditional markets.

  • ➢ Online revenue bounced by 12% YoY and accounted for 3% of BHX's total revenue. Currently, customers can buy fresh foods online easily, choose exactly the available products on that day and also pre-order fresh items for the next day, with 6 same-day delivery options (2 hours each delivery). One thing that not any grocery retailer has the capability to deliver at the moment.

  • ➢ Since early April, BHX is changing new layout for its stores in large scale, to be more convenient and friendly for customers as well as employees. For some new-layout stores that operated stably in 2 months, the sales has increased 15%-30% depending on categories. BHX aims to achieve same-store-growth of minimum 30% at the year-end from the current sales level.

DETAILS OF YTD MARCH 2022 PERFORMANCE AND KEY HIGHLIGHTS IN THE AGM 2022

• • For the other businesses: ➢ An Khang pharmacy chain recorded the total sales of 3.7 times compared to that in 1Q2021. After adjustments in strategies and business model, An Khang will massively roll out both revenue and store network, aiming to the milestone of 400 stores by

  3Q2022.

  ➢ In the newly experimented businesses, AVAKids was chosen to 2nd phase pilot at 50 stores scale by June-end thanks to its encouraging initial results with the average monthly sales of around VND 2 billion per store.

• • Summary of key highlights in the AGM 2022:

  • ➢ MWG's throughout strategy in 2022 is investing in promotion campaigns, customer-related activities, enrich shopping experience in order to expand the customer base, get higher traffic, and increase sales volume, not insist on optimizing profit margin.

  • ➢ ICT and CE retail chains will remain as the Cash Cow businesses for MWG. The Company continues to (i) expand new DMX Supermini chain (expected store-count of 1,000 by the end of 2022) and recruit new freelancers to further exploit the potential demand in remoted areas; (ii) open new flagships stores with area of 3,000-5,000 sqm to serve high-end customer segment in highly urbanized cities; (iii) grow the Topzone chain (operating 50 AAR and APR stores by June-end) to increase the Apple market share from 25% in 2021 to 30% in 2022.

  • ➢ For BHX, the main focuses in 2022 are:

    • i. Creating outstanding customer experiences at physical stores (offering a comfortable environment, ensuring products availability, well-organized and easily identifying merchandises, clear and neat operating process, friendly and kind staffs) and in online channel (shopping fresh foods conveniently with good-quality, fresh and carefully packaged products in faster delivery time).

    • ii. Optimize the backend management platform with digitalized functions, minimizing human involvements to be ready for nationwide expansion from 2023 onwards (the system automatically forecasts daily sales volume to make order for each type of product, controls lost sales possibility as well as alerts slow-moving items to be moved out of the store, suggests the appropriate product range for newly-open stores based on the customers demand and characteristics of each area…)

  • ➢ In 2022-2023, named Bach Hoa Xanh Technology and Investment JSC has plan to issue new primary shares at a maximum of 20% for new investors.

  • ➢ The Company will pay dividends after completing the procedures and receiving the approval of the State Securities Commission. Expectedly, cash dividend with payment ratio of 10%/share (equivalent to VND1,000/share) will be paid in June. Stock dividend with payment ratio 1:1 on the total outstanding shares will be paid in June - July 2022.