Japan group registers to buy additional 20.86% stake in Vietnam electronics retailer

The Japanese firm wanted to add over 3.7 million more TAG shares, equivalent to a 20.86 percent shareholding, to its stock in a period from May 28 to June 12.

However, the value of the deal has not been revealed by any parties involved.

With the recent move, Nojima Corporation, which currently owns about 1.8 million shares, or a 10.06 percent stake in TAG, will own 30.92 percent of the electronics retailer and become its largest foreign stakeholder if the transaction is carried out.

In addition, another foreign shareholder, Aureos Southeast Asia Fund, has registered to sell its entire stake in TAG, or over 3.7 million shares, during the same period.

The Aureos Southeast Asia Fund has been a strategic partner of Tran Anh since 2010.

Thus, if the deal is closed by the two parties, the fund will fully divest from TAG after five years.

Tran Anh Digital World JSC is expanding its network after establishing 15 major electronics shops in the north, and is planning to add 8-9 more stores in the region this year.

In the first quarter of 2015, Tran Anh posted an after-tax profit of VND3.9 billion (US$179,400), up 11.5 percent over the same period in 2014, equivalent to its profit in the entire year of 2014.

With a profit target of VND7.8 billion ($358,800), the firm completed 50 percent of the plan in the first quarter of the year.

Nojima entered Vietnam’s electronics market in 2013 after acquiring a 10 percent stake in Tran Anh.

Grasping opportunities

Nojima’s move is the second big development in the local electronics retail sector this year after leading Vietnamese property firm Vingroup introduced VinPro electronics shops in March at the Vincom shopping centers it runs in major cities across the country, including Hanoi and Ho Chi Minh City.

Meanwhile VinPro+, offering the same kind of products including high-tech gadgets like smartphones, tablets, laptops, electrical appliances, and other accessories, will fill the places where Vincom is still absent from in many other provinces and cities nationwide.

Vingroup has set a target to bring the total number of VinPro and VinPro+ stores to 25 and 100, respectively, in 2015.

According to market research company GfK, sales of consumer electronics reached over VND116 trillion ($5.5 billion) in Vietnam last year, the second consecutive year the sector has achieved an annual growth rate of over 20 percent.

The main engine of growth came from the mobile phone/smartphone segment, with an annual rate of 30 percent, GfK said.

In 2014, Vietnamese spent nearly VND50 trillion ($2.35 billion) buying mobile phones/smartphones, equal to 43 percent of the total spending for all electronic/electric products.

With the overall growth of the market, coupled with the opening of a new series of electronics chains, some firms have announced revenue expansion exceeding the industry’s average in 2014, such as Mobile World (66 percent), FPT Shop (78 percent), and Tran Anh (29 percent).