FPT Retail’s Shareholders General Meeting: The profit will increase by 20%, Long Chau chain still incurs losses
FPT Digital Retail Joint Stock Company’s Shareholders General Meeting (FPT Retail, code: FRT) has passed the business plan for 2019 with the target revenue of VND17,700 billion, up 16%, and the profit after tax of VND418 billion, up 20% compared to 2018.
In that, the revenue is contributed mainly by media which is ITC, with the expected amount of VND17,200 billion; regarding the new industry, which is Long Chau pharmaceutical chain, such sector may contribute only VND500 billion in the revenue without generating profits, the expected loss is VND20 billion.
The promotion of installment purchase and accessories distribution contributes to the growth of 2019
In 2018, FRT implemented the F.Friend program (a companion program with enterprises) at about 250 factories for the employees. This year, FRT will gradually shift its focus to officers.
At the same time, the Company still continues to cooperate with Vinaphone so as to boost the sales. Such channel has brought FRT about VND1,000 billion in the revenue of 2018. It is expected that this program will make the revenue increase by VND300 billion, contributing VND1,300 billion to the total revenue this year.
With the campaign to improve products’ life, the main purposes are to stimulate the customers to buy more products, purchase old machines to exchange new machines, exploit the form of installment payment – accounting for 32% of total revenue. In 2019, FRT plans to increase the contribution from such business to 45%, equivalent to VND1,700 billion, which will be included in the target revenue of VND2,500 billion in order to ensure the growth of 16%.
According to statistics, for former retail chains, the revenue from installment purchase accounts for 50% of the total revenue, so according to Mrs. Diep, FRT still has chances to promote this activity.
In addition, the Company also boosted its accessories segment, with the goal of bringing the revenue of VND1,000 billion, up 67% compared to 2018. At the moment, FRT has worked with the suppliers to buy products from its origin in order to have a 20% more competitive price than the market price while the profit margin still increases by 10% compared to previously.
Concerning online channel, 4 years ago, this sector only contributed 7-8% in FRT’s total revenue, but in 2018, it contributed up to 15%. For the plan in 2019, such business is expected to contribute VND1,000 billion, besides the products of Samsung, Oppo, etc., FRT will include more exclusive products of some specialized labels for online items. At the same time, FRT will deploy new products and new industries. FRT also continues to combine e-commerce exchanges to take advantage of their promotion policies and increase the rate of access.
It is until 2020 that the pharmacies will general profits
Ms. Diep said that for the period from 2019 to 2022, the pharmacies chain will be the main and potential segment that contributes to the growth of FRT.
In 2019, the Company expects to open 50 new pharmacies in order to have 70 stores in total. For the succeeding years, FRT will open about 100 new stores each year. By 2020, Long Chau is expected to have 700 stores.
The pharmaceutical market’s size is of about USD4,5 billion per year, (excluding the consumption goods in the market without invoiced, smuggled goods), which is the same as the size of mobile phone industry. People’s living standards are increasing, there are more willingness to spent on health. In addition, there are more than 30,000 pharmacies nationwide, such number is three times higher than the number of mobile phone stores in the past and such industry is the leading one at the moment.
Therefore, Ms. Diep said that, after the development of distribution system, there is no reason for not considering importing medicines for trading, or even producing medicines ourselves.
FRT will focus on the logistics sector and develop pharmaceutical personnel. Its ambition is to account for 30% of the pharmaceutical market share through pharmacies in the next 3 to 4 years, this industry will contribute about 40% to the total revenue of FRT (about VND10,000 billion).
Ms. Diep shared that, each Long Chau pharmacy is estimated to bring about VND3 billion per month with more than 6,000 SKU, while in other chains, it is about 2,000 SKU, with the revenue of VND600-700 million per month.
Being questioned about the break even time of the stores, Ms. Diep said that she couldn’t state a definite number because in 2018, they were experimenting many different models, hence the break even time depended on the experimented shop’s style. Since 2019, this model has been applied widely in Bien Hoa, My Tho, Long An, the situation in Ho Chi Minh City is quite stable.
At the moment, there are 3 types of pharmacies: A, B and C depending on the location and the area, therefore the investment cost will be different, however, it is about 70-80% of the FPT Shop’s expenses. The inventories is about 1,5 times of the total expenses for construction and repairs. Concerning liabilities, FRT negotiated with the counterparties to pay within 15 to 30 days.
For the plan in 2019, the chain of pharmacies is expected to contribute VND500 billion in the revenue while it still incurs losses of VND20 billion. . The target for 2020 is to reach the revenue of VND2,000 billion and to stop incurring losses; by 2021, revenue of VND4,300 billion and profit of VND62 billion and by 2022, the revenue of VND6,500 billion and profit of VND193 billion.
The Shareholders General Meeting also approved ESOp stock issuance statement in 2018 and policies for 2019; statement of dividend payment, in which 10% by cash and 15% by shares (paid in the second or third quarter of 2019). The Board of Management and the Board of Supervision will also not receive remuneration by cash in 2018 and 2019.
In addition, there is a statement to ask for the shareholders’ opinions on transactions with related parties. Specifically, in 2018, FRT has recovered all the loans of nearly VND71 billion from Ms. Diep. According to Ms. Diep, that was when the Company appointed her to buy Long Chau chain as an individual for the experiment to see whether it is safe and suitable for the development, FRT will later apply such model.
Besides that, FRT also borrowed VND20 billion from FPT Corporation (FPT) last year.
According Phan Hang, Tin nhanh Chung khoan