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Công ty CP Bán Lẻ Kỹ Thuật Số FPT / Company infomation  / AGM of Shareholders of FPT Retail: Number of Long Chau pharmacy stores can be small, but they achieve 3bn VND of turnover each month, tenfold that of ordinary stores
2 May

AGM of Shareholders of FPT Retail: Number of Long Chau pharmacy stores can be small, but they achieve 3bn VND of turnover each month, tenfold that of ordinary stores

After 2018, FPT Retail has figured out a model and formula for opening a new store and planned to open stores in provinces neighboring Ho Chi Minh City. As for competitive capacity of Long Chau pharmacy store chain, Ms. Nguyen Bach Diep said:  “The number of Long Chau pharmacy stores can be small but each achieves 3bn VND of monthly turnover on average, while an ordinary store can do only 300-400mn per month”.

In the morning of March 27, FPT Digital Joint Stock Company (FPT Retail, FRT) held its AGM of Shareholders of 2019 in order to announce the planned turnover of 17,700bn VND and profit after tax of 418bn VND with increasing rate of 16% and 20% respectively compared to 2018. From such targets above, the Board of Management set the target dividend in cash at no lower than 10%.

On preliminary business results of the first 3 months of 2019, the Company says the iPhone section results strongly affected bottom lines of the first 2 months of the year. FPT Retail is currently researching to engage in new sections and seeking for more partners.

Back to the meeting this morning, a large part of contents in discussion focused on how to increase profit by 20% in 2019? And the anticipated time when Long Chau pharmacy store chain stops loss?

Long Chau pharmacy chain to expand to 70 stores in 2019

Addressing the shareholders at the AGM, FPT Retail leadership stated that the 2019 plan would expand into retail sections with pharmacy being on top of the list. According to the plan, the Company would expand the Long Chau pharmacy store to 70 stores and increase coverage nationwide.

According to the Company’s representatives, the pharmacy section has significant long-term growth potentials. Therefore, FPT Retail set the initiative to develop into this section with good planning and control as similar to operating the electronic retail system. The Company would accordingly focus on building logistics, increasing the number of stores and developing a staff with suitable management and professional capabilities.

In Vietnam, the pharmacy retail section is divided practically into 3 channels – hospital channel, clinical channel and pharmacy store channel. FPT Retail expects to gain a market share of 30% of the pharmacy store channel in the coming 3-4 years. Accordingly, the pharmacy retail section is anticipated to contribute about 40% in FPT Retail’s expected turnover of 10,000bn VND. The potential turnover of FPT Retail is 4.5bn USD without the pharmacy retail section, despite the saturated mobile phone retail section.

As an answer for shareholders’ question “When will Long Chau stop loss?” the leadership informed that the breaking even of a pharmacy store has not yet been recorded accurately so far. Stores in Ho Chi Minh city has quite stable business results without any store breaking even later than 6 months. Since engaging into the new business section in 2018, FPT Retail has tested if this model was effective, which informed the Company on locations with good turnover. Moreover, the Company has dedicated an area inside FPT shops to run Long Chau pharmacy stores. As for the question of loss or profit, FPT Retail’s representatives stated that the time of breakeven depends on the shop type.

After 2018, FPT Retail has figured out a model and formula for opening a new store and planned to open stores in provinces neighboring Ho Chi Minh City. As for competitive capacity of Long Chau pharmacy store chain, Ms. Nguyen Bach Diep said: “The number of Long Chau pharmacy stores can be small but each achieves 3bn VND of monthly turnover on average, while an ordinary store can do only 300-400mn per month.

Online selling to be boosted

Secondly, as for phone accessories and SIM cards, FPT Retail sets turnover targets for 2019 of accessories at 1,000bn VND, up by 350bn VND, while the collection SIM cards section is expected to increase by 100bn VND. These will be strategic sections contributing into turnover and high profit for FPT Retail in 2019.

The Company will put a special focus on boosting online selling. In the face of the e-commerce boom, FPT Retail will offer numerous promotional and discount programs to best fit the online selling method. To be specific, products of equivalent quality and guarantee policy when being sold on the website will have lower prices compared to when being sold at shops. Moreover, new products will be constantly updated by the manufacturers with priority for eye-catching and trendy products expected to sell well.

Does FPT Retail cross-sell products as Mobile World?

At the general meeting, FPT Retail stated that each line of business needed research on future potentials, there were a series of projects on trial run by FPT Retail, the investments of which would be announced once highly successful results have been reached.

The Company is in negotiation with partners. FPT Retail aims to limit saturated areas and give room for better new areas. For instance, accessories prices of the Company in the past were higher than those of other sellers. Therefore FPT Retail began turning toward working with importers, which cut down prices by 20%.

Moreover, the Company improves the process effectiveness of F.Friends Project in way of further improving and applying many technologies in the process of approving and managing customer files and risks. Furthermore, FPT Retail will develop project staff at each region in order to search for and utilize optimally potentials from affiliated businesses as well as to run the project more effectively.

After re-activating the F-Friends program and the Subsidy selling price support program in the end of August 2018, sales from the two programs contributed 5.3% and 5% respectively in FPT Retails’ total turnover in 2018.

As for details of the F.Friends program, the Company’s representatives said that the F.Friends program would directly reach enterprises for contract signing, after which employees of such enterprises would be allowed to buy any product on credit at the interest rate of 0%, monthly installments would be deducted directly into their salaries. Normal customers buying on credit may get rejected due to ineligibility or there are products not to be paid on credit at the interest rate of 0%. This means more professional buying compared to normal buying on credit.

ĐHĐCĐ FPT Retail: Số lượng nhà thuốc Long Châu nhỏ nhưng doanh thu đạt 3 tỷ đồng/tháng, gấp 10 lần cửa hàng thông thường - Ảnh 2.

The general meeting this morning also approved of the dividend payment plan for 2018 at the payout ratio of 25%, of which 10% is in cash and 15% in shares. Dividends are scheduled be paid in the period from the 2nd Quarter to the 3rd Quarter this year. After issuing of shares as dividend payment, the charter capital of FPT Retail will rise to 790bn VND. Moreover, the Company also approved the plan ò issuing 680,000 ESOP shares at 10,000 VND per share. Half of the newly issued shares will be restricted from transfer for one year starting from the completion date of ESOP shares issuance. Members of FPT Retail’s Board of Management and Board of Directors continues to receive no remunerations in 2019.

On the basis of above points, FPT sets the target of a 20% rise in profit in 2019.

At the end of 2018, FPT Retail recorded total turnover at 15,298 bn VND, which is a up by 16% compared to 2017. Turnover from online trading reached 2,432 bn, which recorded a rise by 21%. Profit before tax reached 435 bn and profit after tax reached 348 bn, up by 20% compared to 2017.

The number of F-Studio by FPT shops (including APR and AAR side-by-side shops) reached 14 in 2018. Sales of this shop chain contributed 423 bn in FPT Retail’s total turnover, up by 61% compared to the same period of 2017.

By the end of December 2018, the total number of FPT Shops is 533 with an increase of 60 shops compared to the end of December 2017. Average sales of each shop scored 2.4 bn/month, with a slight increase compared to 2017.

 

According to Tri Tuc, CafeF