Retail Industry 2024 - AS BAMBOOS GROW OLD, YOUNG SHOOTS SPRING UP
We anticipate that the overall picture of Vietnam retail will flourishes in H2-2024, following the economic recovery. Moreover, we believe that the level of growth will be vary across subsectors of the retail industry, including grocery, ICT/CE, pharmacy and specialty (jewelry) retail. Besides, we think the plan of “cost optimization strategies” mentioned by Vietnam retailers in 2024 will also be a highlight of the industry. In our viewpoint, the drivers of Vietnam retailers’ performance in 2024 and onwards will be their nascent businesses (as we drew its likes young
shoots, grocery, pharmacy or jewelry for examples) while the traditional business (as we drew its likes bamboos, ICT/CE for instance) is expected to rebound step-by-step to its normal level. Backed by this, together with business plan of Vietnam listed retailers, we recommend that MWG (owns the BHX chain) and FRT (owns the Long Chau chain) will show the strongest sales growth in the industry.
We see that valuation of the retail stocks is improving since Nov-2023 on the 2024 positive sales growth expectation. Besides, we suggest that the negative expectation on retailers’performance was priced in the stock prices’ movement in 9M2023. Among retail stocks covered by VDSC, MWG shares is the stock owning the highest expected stock price increase. As a result, we believe that MWG is the most potentialretailstock that investorsshould consider in 2024.
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