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Dragon Capital funds bet on MWG

Released at: 17:44, 29/08/2016

Dragon Capital funds bet on MWG

Photo: Duc Anh

Three funds increase their holding in MWG to 5.33% in total.

by Duy Anh

Three funds under the management of Dragon Capital have purchased additional shares in the Mobile World Group (MWG), Vietnam’s leading mobile phone retailer, and become one its largest shareholders, with a total holding of 5.33 per cent, or 7.8 million shares.

The Vietnam Investment Fund Management Company (VEIL) still held 3.64 per cent while its subsidiary Amersham Industries Limited bought 0.5 per cent.

Norges Bank and The CH/SE Asia Investment Holdings Pte Ltd both increased their holdings in MWG, to 0.85 per cent and 0.03 per cent, respectively.

The Dragon Capital purchase has drawn a lot of attention as other foreign funds have been trying to divest from MWG. Mekong Capital, the owner of the Mekong Enterprise Fund II (MEF II), has registered to sell 2,708,371 MWG’s shares from August 29 to September 17 via put through.

On June 29, the NTAsian Discovery Master Fund sold 1 million MWG shares to reduce its holding to 4.76 per cent and no longer be a large shareholder.

In late-April, another large shareholder, CDH Electric Bee Limited, transferred its ownership of 4.4 million MWG shares to nine other organizations, bringing its holding down to 5.27 per cent.

MWG continues to grow, with growth since mid-May at 90 per cent.

In the first seven months of this year it earned revenue of VND23.3 trillion ($1.04 billion), up 80 per cent year-on year, and net profit of VND981 billion ($44 million), up 71 per cent. The company opened 305 new stores nationwide, including 263 new thegioididong.com stores and 42 new dienmayxanh.com stores. As at June 30 it had 938 stores, including 827 thegioididong.com stores.

In the first six months its share price soared 64.5 per cent, from VND79,000 ($3.46) to VND130,000 ($5.7).

Dragon Capital is now the sixth-largest shareholder in MWG, joining the Retail World Investment Consultancy Ltd. Co., with 13.15 per cent, the Tri Tam Ltd. Co. with 9.86 per cent, MEF II with 9.24 per cent, PYN Elite Fund with 7.07 per cent, and CDH Electric Bee Ltd with 5.27 per cent.

According to research by GFK Vietnam, mobile phone sales increased 27 per cent year-on-year in the first half of 2016 as customers moved from low-cost mobile phones to smartphones and it expects the total number of phones sold in 2017 will increase by 20 per cent.

Meanwhile, Pokemon Go is expected to drive MWG’s sales. According to Mr. Nguyen Ngoc Thach, Individual Client Brokerage Manager at Saigon Securities Incorporation, the game will most likely increase sales of hardware.

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