Case: Valuing Mobile World (MWG)
Mobile World Investment (MWG) is Vietnam’s largest consumer-electronics and grocery retailer, with revenue of approximately VND 134 trillion (FY2024) generated through a dense national store network. A retailer’s revenue is built from the ground up, so this case forecasts the top line as store count multiplied by revenue per store, a sales-driven model in which the percent-of-sales method then scales working capital and capital expenditure to the revenue plan. Because the business is revenue-led and capital-light relative to heavy industry, price-to-sales (P/S) and EV/EBITDA cross-checks sit naturally alongside the DCF, anchoring the value to how the market prices comparable retailers per dollar of sales and per unit of operating cash earnings.
Why it matters
A retailer grows by opening stores and selling more through each one, so the honest way to forecast its revenue is to build it from those two drivers rather than to trend a single growth percentage. Store count times revenue per store gives a top line you can interrogate. Are the new-store assumptions realistic, is revenue per store rising or maturing. Once revenue is set, most other lines follow it. Inventory, receivables and store capital expenditure all scale with sales, which is the percent-of-sales idea. Two market cross-checks fit a revenue-led business well, price-to-sales because revenue is the cleanest line, and EV/EBITDA because it neutralises differences in leverage across retail peers.
Formulas
Worked examples
Mobile World reported revenue of approximately VND 134 trillion (FY2024). For illustration only, suppose the chain runs 3,000 stores at an average revenue of VND 45 billion per store, and a comparable retailer trades at a price-to-sales ratio of 0.4. How does a sales-driven build work, and how does P/S discipline it?
These store and per-store figures are illustrative and anchored only to the real revenue scale of about VND 134 trillion. The sales-driven build multiplies store count by revenue per store, 3,000 stores times VND 45 billion, which is about VND 135 trillion of revenue, in the right neighbourhood of the reported scale and easy to stress-test by flexing either driver. Forecast revenue then drives the rest of the model. Inventory, receivables and store capital expenditure each scale to sales through percent-of-sales ratios drawn from history. For the cross-check, a peer price-to-sales of 0.4 applied to revenue of roughly VND 134 trillion implies an equity value near VND 54 trillion, a market-based anchor to compare with the DCF. An EV/EBITDA cross-check adds a second, leverage-neutral reference. If all three roughly agree, the valuation stands on firmer ground than any one method alone.
Common mistakes
- ✗A retailer is best forecast with a single revenue growth rate. Building revenue from store count and revenue per store exposes the operating assumptions a single growth percentage hides.
- ✗Percent-of-sales means every line grows at the same rate as revenue. Only items that genuinely scale with sales, such as inventory, receivables and store capital expenditure, are tied to revenue, while fixed and one-off items are not.
- ✗Price-to-sales captures profitability. Revenue says nothing about margin, so a P/S cross-check is only fair against peers with similar margin structures.
- ✗One cross-check is enough. Pairing a price-to-sales check with a leverage-neutral EV/EBITDA check gives two independent references and a more robust read than either alone.
Revision bullets
- •Mobile World (MWG) is a sales-driven retailer, revenue about VND 134 trillion (FY2024)
- •Forecast revenue as store count multiplied by revenue per store
- •Scale working capital and capital expenditure to revenue via percent-of-sales
- •Cross-check the DCF with price-to-sales against retail peers
- •Add an EV/EBITDA check to neutralise differences in leverage
- •Price-to-sales ignores margin, so compare only similar-margin peers
Quick check
The most informative way to forecast revenue for a retailer like Mobile World is to
Why pair a price-to-sales cross-check with an EV/EBITDA cross-check for a retailer?
Connected topics
Sources
- Mobile World (2024)Mobile World Investment Corporation. FY2024 Annual Report.Source for the revenue scale of approximately VND 134 trillion. All store counts, multiples and valuations in this case are illustrative.
- Titman & Martin, Ch. 6Titman, S., & Martin, J. D. Valuation: The Art and Science of Corporate Investment Decisions. Pearson.Grounds sales-driven and percent-of-sales forecasting of the integrated financial statements.
- Damodaran on revenue-driven valuationDamodaran, A. Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. Wiley.Develops revenue-driven forecasting and the price-to-sales multiple as a cross-check on intrinsic value.