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Công ty CP Bán Lẻ Kỹ Thuật Số FPT / Company infomation  / Ms. Nguyen Bach Diep: FPT Retail finds new opportunities before industry saturated
5 May

Ms. Nguyen Bach Diep: FPT Retail finds new opportunities before industry saturated

  • The Company submits the plan to increase revenue by 20% and profit by 30% in 2022.
  • In the first quarter, it is estimated that the revenue will increase by 65% and profit before tax is 5 times higher than the same period last year.
  • Dividends of 2021 are divided at the rate of 55%, including 5% of cash dividends and 50% of stock dividends.

On the afternoon of April 15, FPT Digital Retail Joint Stock Company (FPT Retail, HoSE: FRT) holds the Annual General Meeting of Shareholders 2022 to approve the business plan for 2022, pay dividends of 2021 and set up the plan to expand Long Chau chain, FPT Shop.

At least 70 FPT Shop stores and 300 Long Chau stores plan opened

At the meeting, the Board of Directors presents to the shareholders the plan of this year including the revenue of VND 27,000 billion, up 20%, profit before tax of VND 720 billion, up 30% and cash dividend rate of 10%.

The Company aims to continue to expand FPT Shop and Long Chau chain to 717 and 700 stores respectively by the end of the year. Thus, the Company will newly open at least 70 FPT Shop stores and 300 Long Chau stores.

To be specific, in the first quarter of 2021, FPT Retail opens 70 laptop centers and achieves success, so this year, it will continue to promote this model. In addition, FPT Shop will also continue to expand its coverage in densely populated districts where the number of FPT Shop stores is not commensurate or not available, with the number of new stores from 70 to 100 expectedly.

With Long Chau, FPT Retail plans to expand its coverage to 63 provinces and cities, increasing the total number of stores from 700 to 800 by the end of 2022, equivalent to 300 to 400 new stores. Along with that, the Company also invests in infrastructure and logistics system and expands exclusive products and private labels. The Company aims to have about 50 private label products developed in the year.

Mr. Hoang Trung Kien, the General Director says that the Company has now surpassed 600 Long Chau stores. Therefore, the opening of new Long Chau stores this year is very likely to exceed the target.

Dividends divided at rate 55% in 2021

Looking back at 2021, the Company records the consolidated revenue of VND 22,495 billion, up 53%. In which, Long Chau chain’s revenue reaches VND 3,977 billion, 3.3 times higher than that in 2020; laptop revenue reaches VND 5,700 billion, 2.2 times higher, that of Apple products is 1.6 times higher. Profit before tax is recorded at VND 554 billion, 19.5 times higher; Long Chau chain starts to have profits with the profit after tax of VND 443.7 billion, 18 times higher. By the end of 2021, FPT Retail has 647 FPT Shop stores in total, and 400 Long Chau stores, double compared to the end of last year.

With the results achieved in 2021, the Board of Management has submitted the plan to pay stock dividends at the rate of 50% and cash dividend of 5%. The Company plans to issue another 39.5 million shares to pay dividends, thereby increasing its charter capital from VND 790 billion to VND 1,185 billion. The latest time to pay cash and stock dividends is the third quarter.

In addition, the Board of Management also proposes to supplement new business lines such as lottery, betting, wholesale of other household goods, other supporting service activities related to transportation, etc.

Finally, the meeting elects the Board of Management and the Supervisory Committee for the new term of 2022-2027. The list of nominees consists mostly previous persons being re-elected.

BOD of FRT answered at the meeting. Image source: M.H

Discussions:

Always looking for opportunities to expand product lines, interested in healthcare industry

– What is the driving force of FPT Shop when the epidemic is under control?

Mr. Hoang Trung Kien, General Director: The Covid-19 epidemic has created a strong online working and learning environment, resulting in great demand to buy computers. FPT Retail has exploited this opportunity well from the source of goods to logistics activities. In 2022, when the epidemic is under control, the demand for computers will certainly decrease. However, in the medium and long term, I think the demand for computers is still high. On average, Vietnam has 1 million children born each year, which means 1 million young people will go to school. The epidemic has ended but teachers still prepare lessons by computer, students do homework by computer, workers still have online meetings…

Currently, MWG is also deploying the Topzone chain, will the growth rate of FPT Shop decrease when facing this competition?

Mr. Hoang Trung Kien: At the end of the first quarter, Xiaomi has more distributors and has risen to the second position in market share in Vietnam. The more participants the market has, the more competitive it becomes. However, in general, the whole market all benefits, the consumers can buy at better prices, the retailers also have to improve the service quality.

After 2 years of Covid-19, the supply chain has been disrupted, the trade closes causing the amount of Apple hand-carried products to decrease, which gives large retailers the opportunity to gain the market share.

Can you share about the future expansion plans?

– Ms. Nguyen Bach Diep, Chairman of the Board of Management: FPT Retail is always interested in potential industries and looking for opportunities to open new categories to overlap its growth strategy. Same as FPT Shop, the pharmaceutical segment – Long Chau chain is the growth engine.

FPT Retail will not wait for the industry to become saturated to look for new opportunities, the investment strategy department of the Company is still in the process of research and selection.

With the pharmaceutical segment, FPT Retail does not intend to keep opening one drug store after another, it will stop opening when enough. However, in the pharmaceutical segment which is very wide, besides medicines, we will also look into new areas such as healthcare.

How does Long Chau chain contribute to profits this year?

Ms. Nguyen Bach Diep: Long Chau will try to contribute the profit of VND 50 to 100 billion depending on the speed of opening new stores.

How profitable is the distribution of Covid-19 medicines, how does it improve the profit margins?

– Ms. Nguyen Bach Diep: The Covid-19 epidemic is only short-term while Long Chau aims to serve consumers to take after of their health. Long Chau uses its strengths to supply Covid-19 medicines to the market as soon as possible at the best prices and does not place much emphasis on the development of this product line as well as its profits.

How is the competition in the pharmaceutical segment when many chains promote expansion plans?

Ms. Nguyen Bach Diep: The pharmaceutical market is still very large, the whole South has only 57,000 drugstores, Long Chau, Pharmacity or An Khang pharmacies together have about 3,000 stores, so there is still huge room for development. On the other hand, the pharmaceutical market was quite messy with many hand-carried goods, so the participation of large retailers will better the market, ensuring genuine products as well as reasonable prices.

Does the Company intend to IPO Long Chau chain?

Ms. Nguyen Bach Diep: We will carefully consider and evaluate the plan that is most beneficial to the shareholders. At the appropriate time, the Board of Directors will consider whether to merge Long Chau into FPT Retail or to offer it separately.

When opening Long Chau chain to tier 2 – 3 cities, will the gross profit margins decrease? Does the Company intend to franchise Long Chau pharmacy chain to other localities?

Ms. Nguyen Bach Diep: I think that in every province, there are cities and there are also groups of rich people. Therefore, we decentralize goods from imported goods to domestic goods: in high-income areas, we sell imported products, and in low-income areas, we sell domestic products. For each item hierarchy, we negotiate to have the same gross profit margin, so there is no impact.

In the short term, we do not have any franchise policies for Long Chau stores.

Can you update business results of the first quarter?

Mr. Pham Duy Hoang Nam, Chief Financial Officer: The consolidated revenue increases by 65% ​​(PV – about VND 6,782 billion), profit before tax is 5 times higher than that in the first quarter of 2021 (PV – VND 194 billion). Accordingly, the Company achieves about 28% of the profit target of 2022. With this result, we are confident to complete the business plan of this year.

Doesn’t FPT Corporation have plans to divest from FPT Retail?

Ms. Nguyen Bach Diep: Mr. Truong Gia Binh, the Chairman of FPT says that we have no plan to divest from FPT Retail.

Does FPT Shop have a shortage of laptops and phones?

Mr. Nguyen Viet Anh, Deputy General Director: Although the supply chain has problems, FPT Shop is a big partner of phone and laptop companies so we have priority. Therefore, there may be a shortage of goods in some places of FPT Shop, but we still ensure that the source of goods is not interrupted.

How is the online revenue? Does the Company have an expansion plan?

The Company’s representative: Online revenue in 2021 accounts for about 28% of the total revenue and increases by 21% compared to the previous year. The majority of online revenue comes from FPT Shop, while Long Chau only accounts for about 5%. On one hand, Long Chau’s website is new, on the other hand, the medicine products are specific, only a few products such as functional foods are sold online.

Do you have plans to bring Long Chau chain to overcome Pharmacity?

Ms. Nguyen Bach Diep: The orientation of each chain is different, so it is difficult to say whether we overcome or not. With Long Chau, the Company features the efficiency. Up to now, its average revenue per store is the highest in the market. We will not expand at any costs.

What is the goal of buying a Vietnamese-Korean company?

Mr. Hoang Trung Kien: That is to invest in the logistics system of Long Chau chain. We are investing in warehousing and logistics to serve the delivery of the Long Chau chain nationwide.

The meeting ends, the shareholders approve for the proposals, the nominees of the Board of Management and Supervisory Committee are elected.

According to Ngoc Diem, NDH

Published April 15th, 2022