The Fallen Electronics Giant: What Led to its Demise and a Mobile World Takeover?

Mobile World Investment Corporation (stock code: MWG ) recently sent a document to the State Securities Commission of Vietnam, the Vietnam Stock Exchange, and the Ho Chi Minh City Stock Exchange, announcing the decision to dissolve Tran Anh Digital World JSC.

The reason given for the dissolution was Mobile World’s desire to restructure its subsidiaries to optimize operations.

In reality, Tran Anh Digital World JSC is a subsidiary of Mobile World, with a 99.33% ownership stake.

After nearly seven years under Mobile World, the Tran Anh electronics brand has officially disappeared from the market. While Mobile World cited restructuring as a reason to optimize its subsidiaries, the Tran Anh chain has not been operational since 2018.

How was Tran Anh performing before its demise?

Tran Anh Digital World JSC, formerly known as Tran Anh Trading and Services Co., Ltd., was established on March 11, 2002. The company was once a well-known brand, owning the Tran Anh electronics chain and being a leading distributor of IT and electronics products in the Northern market.

Tran Anh transitioned to a joint-stock company model on August 8, 2007. From 2007 to 2017, the company’s revenue grew steadily, reaching a record high of over VND 4,000 billion in 2016. During its golden period, the Tran Anh brand had up to 39 electronics supermarkets, mainly in the Northern provinces. However, in 2017, the company recorded a loss of over VND 60 billion due to rapid expansion.

In August 2017, Mobile World and Tran Anh officially announced the merger. By January 2018, Mobile World had completed the acquisition of Tran Anh, becoming the parent company controlling its operations.

Following the merger, Mobile World transformed Tran Anh’s business model, turning the electronics chain from an independent retailer into a partner of MWG. As a result, Tran Anh’s main source of revenue became rent from leasing its premises, offices, assets, and brand. The company’s main asset is its bank deposits, which generate interest income annually.

Tran Anh’s revenue dropped from several thousand billion VND per year to just over VND 100 billion. Its selling expenses decreased to zero, and profits were mainly derived from financial activities.

On August 14, 2018, Tran Anh’s shares were delisted and closed at a price of VND 34,900 per unit, equivalent to a market capitalization of about VND 865 billion. Tran Anh was then moved to the Upcom market and lost its public company status in October 2022 due to its shareholder structure not meeting legal requirements.

According to financial reports, from 2019 to 2022, Tran Anh only recorded a pre-tax profit of slightly over VND 10 billion per year.

Prior to Tran Anh, Mobile World had also dissolved 4Kfarm JSC and Logistics Toan Tin JSC. The reason for dissolving these companies was to restructure its subsidiaries and optimize operations.