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Công ty CP Bán Lẻ Kỹ Thuật Số FPT / Company infomation  / FRT’s General Meeting of Shareholders: Encroaching on “self-made products”, Long Chau chain plans to reach the revenue of VND 1,500 billion
24 Jun

FRT’s General Meeting of Shareholders: Encroaching on “self-made products”, Long Chau chain plans to reach the revenue of VND 1,500 billion

At the General Meeting of Shareholder of FPT Digital Retail Joint Stock Company (stock code: FRT), which was in this afternoon, Ms. Nguyen Bach Diep, Chairman of FRT’s Board of Management, said that Long Chau chain aims to increase its revenue by triple to VND 1,500 billion, which is by expanding the number of stores to 220 in 2020. And Long Chau is also promoting the development of “self-made” products of functional foods, medical equipment, pharmaceuticals and cosmetics. In the second quarter of 2020, FRT’s revenue may be decreased by 10 to 15% due to Covid pandemic.

Sharing at the General Meeting, Ms. Diep said that in the first quarter of 2020, FRT achieved quite good results compared to the fourth quarter of 2019, however, in the second quarter of 2020, the revenue could be reduced by 15 to 20% compared to the first quarter. Due to the impact of the Covid pandemic, one-third of the total number of FPT Shop, equivalent to 170 stores, closed and although opened in May, the consumers’ demand still sharply decreases.

However, during the closing, FRT asked for the adjustment of the rental price and also acquired approval. The duration of the discount is 3 months, from April to June of 2020. This is a great support for the overall business results of the Company.

In 2020, the revenue of the pharmacy chain grows while that of FPT Shop chain decreases

In 2020, FRT plans to achieve VND 15,320 billion of revenue and VND 220 billion of profit before tax, down by 8% and 21% respectively compared to the initial target of 2020.

Regarding the revenue structure, Ms. Diep said that after assessing the impact of the Covid pandemic, FRT set a target of VND 13,820 billion of revenue from FPT Shop chain, while that in 2019 was VND 16,100 billion. And in 2020, the Company will proactively minimize the flaws and weaknesses of F-Friends and Subsidy in 2019, which will also affect the Company’s revenue.

“2020 can be considered the year when FPT retail system is at the bottom,” Ms. Diep said.

In order to achieve the above revenue target, according to Ms. Diep, the Company will continue to promote online sales for FPT Shop chain. In the previous pandemic, online revenue has contributed up to 50% to the Company’s total revenue, while on average, it was 25%.

Besides the common difficulties in the market, the decline in non-essential needs and the flow of visitors at store will affect FRT in achieving its target of exploiting sales opportunities.

Ms. Diep took a specific example, if in the past, we could only successfully reach the deal with 3 out of 10 visitors, now our goal is to successfully reach the deal with 5 visitors. At the same time, we will boost the average value of the invoices, for instance, on average, an invoice of a customer is at VND 5 million, now we will try to stimulate their spending, to VND 7 million by instalment payment policy, for example.

Moreover, the Company will diversify the customer group instead of passively waiting for the customers to come to the stores, to be specific, the Company will cooperate with Mobifone, DH FPT, or FPT Telecom.

For Long Chau chain, the significant increase in its revenue is due to the continuing expansion of stores

“Long Chau’s gross profit margin is higher than that of mobile segment, by nearly 3%. However, this is just the beginning, after the investment period, dominating the market, reaching a stable scale, negotiating with the firms, and implementing the strategy of self-producing some products will definitely improve the profit margins,” said Ms. Diep.

Regarding the expansion of Long Chau chain in a time when the Company has not yet generated profits from this segment, along with large debts and being affected by the Covid pandemic, Ms. Diep said that opening a new business chain requires investment and losses at the start. The important thing is when the number of new stores opened is less than the number of existing stores, will come the chance of break-even.

Besides that, when the scale is large enough, the ability to negotiate with the landowners will have an effect. In addition, the ability to manage the cost of deploying back-office teams to support the business teams will be more optimal, and gradually it will become fixed costs.

“The same story happened for FPT Shop, it used to incur losses for 2 to 3 years during its expansion. However, in the following years, it has been growing very quickly”, Ms Diep said, “For Long Chau pharmacy, it will break even and gain profits after 6 months”.

Sharing at the General Meeting of Shareholders, the Chairman of FRT said that stabilizing the cash flow is also a key goal of the Company, thanks to the cash flow from 600 FPT Shops (with no current expansion plan), the optimal management of inventories, negotiation with the suppliers on time of delivery and term of payment.

Regarding to target of reaching VND 220 billion of profit, Ms. Diep said that the Company will try efforts to achieve VND 1,000 billion of turnover from accessories (in 2019, only VND 800 billion). FRT expects the investment in technology improvement in 2019 will help optimize the costs in 2020.

New business line expansion

Mr. Hoang Trung Kien, General Director, said that FRT is oriented to become the leading multidisciplinary retailer in Vietnam in the next 3 years, through the diversification of digital lines and the development of shop-in-shop model. At the same time, the Company will continue to focus on investing in Long Chau pharmacy chain after finding its secret to success in 2019.

Currently, FRT and the Board of Directors of Long Chau has proceeded the expansion, in the past week, it is declared that there have been 100 stores nationwide. In 2020, Long Chau chain aims at reaching 220 stores.

Simultaneously, FRT is also seeking for new business chances, new business lines to promote existing experience such as retail chain management, technology-based management, customer service experience, etc. In the reports to the Meeting, the content of supplementing new business lines is for the purpose of preparing for this goal.

“These are the motivations for FRT in the next 3 years”, said Mr. Kien.


In 2019, FRT has to make provision of approximately VND 100 billion to handle bad debts

In 2019, FRT’s revenue was VND 16,634 billion, up 9% compared to that of the previous year; profit before tax was VND 278 billion, down 26%. The reason for the decrease was mainly because FRT made provisions for bad debts in the fourth quarter of 2019; invested in digital conversion for FRT, including 2 chains being FPT Shop and Long Chau, and expanded Long Chau chain.

Ms. Nguyen Bach Diep said that, in 2019, the turnover of 2 programs F-Friends and Subsidy witnessed a sharp decrease, which resulted in the fall of the Company’s turnover. To be specific, the turnover of F-Friends was VND 800 billion, down 1.4%; that of Subsidy was VND 100 billion, which was deceased by more than 85% compared to that of the same period in 2018 (in 2018, VND 764 billion).

The profit of 2019 was affected by the system, which made the Group have to handle bad debts for 2 programs F-Friend and Subsidy. The provision made in 2019 was about VND 100 billion, while in 2020, only VND 10 to 15 billion.

In addition, in accordance with the orientation of importing international accessories to increase the profit margin, in 2019, the Company must liquidate all domestic accessories.

According to Phan Hang, Dau tu Chung khoan

Published May 28,2020