X-Alpha | MWG 106,800 +37%: Deeply Discounted Valuation

VALUATION VIEW

BSC maintains its STRONG BUY recommendation on MWG with a one-year target price of VND 106,800/share, implying an upside of 37% versus the closing price on June 10, 2026, based on the sum-of-the-parts valuation method. This represents a 5% downward adjustment from our latest target price (link), reflecting the impact of a higher interest rate environment on our target P/E assumptions.

INVESTMENT THESIS
Please refer to our previous report (_BCT).

I. After consistently exceeding its 2024 and 2025 plans by 155% and 145%, respectively, BSC expects MWG’s 2026 earnings to exceed its adjusted NPAT plan by 19%, after factoring in the impact of the DMX IPO. This is supported by MWG’s ability to capture structural shifts in the industry and its optimized operating model, based on: (i) DMX as the key profit pillar; (ii) financial income expected to grow by more than 20% LFL; and (iii) BHX as the key growth pillar, with earnings expected to grow by 92% YoY as it enters a new 2026–2030 growth cycle.

Valuation has been discounted to an attractive level, with 2026 forward P/E at 11.0x. Based on BSC’s estimates, the current valuation only reflects DMX’s valuation based on the pre-IPO price, cash, and around 50% of BHX’s valuation based on the value from the 2024 strategic stake sale, and has not yet fully reflected the outlook of all business segments.

II. We maintain our long-term growth expectation, with a 2026–2030 CAGR of over 15% per year, driven by a new growth phase and potential re-rating opportunities through the IPOs of DMX and BHX, as well as potential from the e-commerce market.

• DMX, including Erablue, is breaking the perception of a saturated industry through financial and utility pillars, Dien May Xanh technician services, Superapp, and Erablue, which is expected to become an Indonesian version of DMX. This fits the investment appetite for sustainable growth and regular cash dividends, with a minimum payout of 50% of NPAT.
• BHX has room to expand its market share from 4.1% in 2025E to 10% in 2030F, supported by the accelerated rollout of its efficient store model and its target to achieve an IPO in 2028. This fits the investment appetite for high-growth opportunities.

CATALYSTS: (1) MWG is expected to open up new investment opportunities ahead of Vietnam’s potential market upgrade, indirectly supporting MWG’s re-rating; (2) shareholder returns are expected to continue increasing compared with 2026, through cash dividends, treasury shares, and other mechanisms, supported by 2026 earnings performance.

RISKS: Weaker-than-expected consumer demand may affect earnings expectations and BHX’s store expansion activities. Other risks include volatility related to market liquidity and the “stock market IPO” trend.