However, retail share prices have increased sharply, and retailers’ capitalization value has increased by tens of billions of dong.

MWG shares of The Gioi Di Dong (Mobile World) have seen prices increase sharply over the last two weeks from VND45,000 to VND49,000 per share. As such, in the last two months, MWG prices have surged by 22 percent.

The capitalization value of the company owned by Nguyen Duc Tai has soared by VND16 trillion ($670 million) to VND72 trillion ($3 billion), despite low revenue in the first months of the year, especially in May.

The hi-tech product retailer is in a price war in an attempt to recover revenue. The price discounts have been applied to many product items which is predicted to have a big impact on the company’s profits. Meanwhile, MWG share prices have been increasing.

This is also the situation of other retailers such as FPT Retail and Phu Nhuan Jewelry (PNJ). The sharp fall in demand in the first months of the year caused difficulties for enterprises, but the most difficult period is over.

The prices of FRT shares of FPT Retail have increased even more sharply than MWG. Just within two months, FRT price soared from VND54,000 to VND79,500 per share on July 17, or 32 percent. FPT Retail capitalization value increased by VND3.5 trillion.

PNJ share prices soared from VND71,800 on July 7 to VND80,300 on July 17, or 12 percent.

Analysts say that retail shares have surged over the last two months despite unsatisfactory business results in the first quarter and May. Retailers have had to cut  selling prices to boost sales, which has lead to the profit decreases. 

The company that started the price war was The Gioi Di Dong, which was a surprise to the public, because The Gioi Di Dong is positioned as the retailer which always sets retail prices higher than its rivals and provides high quality services.

To date, retailers have not made public their business results in June and the first six months of the year. However, securities companies have predicted sharp profit decreases of retailers as a result of the price war.

Previously, MWG usually updated information about its revenue and profits monthly. However, the company has not announced its profits in the last four months

The Gioi Di Dong launched a big sale promotion campaign on the occasion of the April holiday with the shocking price discount of up to 50 percent. In response, FPT Shop also ran a similar sale promotion program.

Manh Ha