FPT Retail and The Gioi Di Dong Report Strong Q1 Results
In the run-up to the April 30th holiday break, both FPT Retail Joint Stock Company (HoSE: FRT) and The Gioi Di Dong Joint Stock Company (HoSE: MWG) released their Q1 2024 financial results. FRT announced a return to positive profit before tax in its consolidated financial statements, while MWG, following the previous year’s practice, disclosed only revenue figures and kept profit information confidential.
Healthcare Segment Accounts for 61% of FPT Retail’s Revenue
During the first quarter of 2024, FPT Retail reported consolidated revenue of VND 9,042 billion, a 17% increase year-over-year. With this performance, FRT achieved 24% of the annual target set by the board of directors.
FPT Retail returned to profitability after posting a loss of nearly VND 300 billion in 2023. (Photo: FRT)
The healthcare segment remains the primary driver of growth for the retailer. The Long Chau pharmacy chain generated VND 5,534 billion in revenue, contributing 61% to the total revenue and recording a sharp increase of nearly 70% compared to Q1 2023.
Despite softening consumer demand, FPT Shop’s gross profit increased by 3%. This improvement is attributed to the expansion of the product portfolio to include home appliances, electronics, and homeware, which benefited from increased consumer demand for air conditioners and fans during the hot weather. Additionally, access to low-interest capital reduced financial expenses by approximately 50% year-over-year.
These factors enabled FRT to report a profit before tax of VND 89 billion, a significant increase of 43 times compared to Q1 2023. The company thus achieved 71% of its 2024 profit target after just one quarter. This is also the highest quarterly profit for FRT in the past 5 quarters since the beginning of 2023.
As of March 31, 2024, FPT Retail operated 2,381 stores nationwide, with Long Chau continuing to expand rapidly by adding 90 new pharmacies in the past three months. On average, a new Long Chau pharmacy was opened every day, bringing the total number of stores in the chain to 1,587.
During the same period, FRT opened 41 new vaccination centers as part of its strategy to quickly enter the vaccine market. The company aims to establish 100 new stores in this segment by the end of the year.
The Gioi Di Dong’s air conditioner sales surged by 50% year-over-year in Q1 2024, driven by the extended hot weather. (Photo: DM)
At FPT Retail’s recently held 2024 Annual General Meeting of Shareholders in April, FRT’s board of directors announced a strategy to expand the healthcare ecosystem. To finance this strategy, FRT plans to raise capital through a 10% stake sale in the Long Chau pharmacy chain.
In 2024, the company aims to open an additional 400 pharmacies, bringing the total number to 1,900 by the end of the year. Currently, the average monthly revenue per Long Chau pharmacy is approximately VND 1.1 billion. According to FPT Retail’s Chairman, about 1,300 Long Chau pharmacies are already profitable.
FRT has set a revenue target of VND 37,300 billion and a profit before tax of VND 125 billion for 2024, with revenue growth primarily driven by the Long Chau pharmacy chain. For the FPT Shop chain specifically, the company expects revenue to remain at the same level as 2023.
Air Conditioner Sales Fuel TGDĐ’s Growth
For The Gioi Di Dong, its dominant market share in the home appliance segment helped drive a 16% year-over-year increase in revenue during the first quarter of 2024.
The total revenue of the company founded by Nguyen Duc Tai exceeded VND 31,441 billion. This translates to an average daily revenue of over VND 349 billion for The Gioi Di Dong, enabling it to achieve 25% of its full-year plan.
Within the revenue structure, the Dien May Xanh chain remains the primary contributor, accounting for over 46% of total system revenue. Bach Hoa Xanh ranks second with over 29% of revenue, followed by Thegioididong.com and TopZone with a combined contribution of 21.6%.
Mobile phones and laptops are no longer strong growth drivers for electronics retailers. (Photo: FRT)
Notably, sales of the Thegioididong.com and Dien May Xanh chains increased by a combined 70% year-over-year during the quarter, reaching VND 21,300 billion. The primary driver of this growth was the home appliance sector, particularly air conditioners. The Gioi Di Dong’s air conditioner sales surged by nearly 50% in Q1 compared to the same period last year, driven by strong consumer demand amid the hot weather.
Currently, The Gioi Di Dong operates 2,184 home appliance stores and 1,071 mobile phone stores, including TopZone.
As for the An Khang pharmacy chain, The Gioi Di Dong currently has 526 stores in operation. Unlike FRT’s Long Chau, An Khang’s pharmacies are generating only around VND 450 million per store and have yet to reach breakeven.
In the food segment, Bach Hoa Xanh’s revenue grew by 44% in the first three months of the year, reaching VND 9,100 billion, averaging VND 1.8 billion per store per month.
In 2024, Bach Hoa Xanh plans to open 100 new stores. Recently, The Gioi Di Dong announced the completion of the sale of a 5% stake in the holding company of Bach Hoa Xanh (the initial plan was to sell 20% of the total issued shares) to CDH Investments, one of China’s earliest private equity firms.
Despite the strong operating performance in Q1, The Gioi Di Dong kept its profit figures confidential.
In 2024, The Gioi Di Dong’s shareholders approved a business plan with a net revenue target of VND 125,000 billion. Notably, the approved after-tax profit increased by 14 times compared to 2023, reaching VND 2,400 billion.
In 2023, The Gioi Di Dong reported revenue of VND 118,000 billion and its lowest after-tax profit in its business history, at just VND 168 billion, a 96% decrease compared to 2022.
Meanwhile, during the challenging year of 2023, FRT generated revenue of VND 31,850 billion, posted a loss of VND 294 billion, and closed over 30 stores.
