Enterprise

“Chairman Doan Hong Viet: DGW Confident in Completing 2024 Targets”

"Historically, DGW achieves 40% of its annual plan in the first half of the year. While the recent results fell slightly short of this benchmark, the company remains optimistic about its ability to meet its goals. This confidence stems from the introduction of new products from renowned brands like MSI and Xiaomi, as well as the expansion of their FMCG offerings. DGW anticipates that these new additions will include significant products that can drive sales and boost their performance for the remainder of the year."

Administrator

7 August, 2024

This was shared by the Chairman of the Board of Directors of Joint Stock Company The Gioi So (HOSE: DGW) during an investor meeting held on the afternoon of August 6.

Q3 outlook: projected profit of VND 120 billion, confident in fulfilling 2024 plan

According to the plan shared by a representative of DGW, starting from Q3 2024, the company will distribute new products from MSI, including laptops, PCs, monitors, mice, keyboards, and components. Furthermore, by the end of 2024, they will also distribute home appliances such as air conditioners and refrigerators from Xiaomi.

In September 2024, the government will implement the 2G network shutdown, creating a wave of new phone purchases, especially for affordable smartphones.

According to Chairman Doan Hong Viet, although the shutdown is not happening until September, consumers have been replacing their devices for a while now. They have options to either upgrade to affordable smartphones – DGW is currently working with ZTE and TCL – or opt for feature phones that support 4G.

Additionally, Q3 is the time for phone and laptop replacements after the peak in 2021, and with the distribution of new MSI products, DGW expects a revenue of VND 6,000 billion in Q3, an 11% increase compared to the same period last year. The projected after-tax profit is VND 120 billion, an 18% increase.

Source: DGW

Looking at the full-year plan for 2024, the Chairman of DGW is confident that the company can fulfill its goals, even though only 37% of the plan was achieved in the first two quarters.

“Usually, in the first half of the year, DGW achieves 40% of the full-year plan, but with the recent results, we are slightly below that. However, we remain confident in completing the plan, driven by new products from MSI and Xiaomi, as well as the addition of new FMCG products. We hope to have a strong enough offering to boost our sales”, said Chairman Doan Hong Viet.

Purchasing power for phones and laptops in the last six months of the year is not expected to be very strong

For laptops, Q3 will see a “back to school” season, and towards the end of the year, many laptops with integrated AI and Qualcomm chips, featuring thinner and lighter designs, will be introduced. However, Chairman DGW noted that these products will not be cheap, so they are unlikely to cause a significant boom in the market, but there will still be growth compared to the same period last year.

Regarding phones, according to unofficial information, the iPhone product line will feature Apple Intelligence and larger screens and batteries for longer usage. DGW plans to increase production for the iPhone 15 launch, but not significantly, as the demand is still weak.

In addition to iPhones, DGW also distributes devices from Xiaomi, which is performing well and gaining market share from other Chinese brands, so growth is expected in this area as well.

According to the Chairman of DGW, the laptop and phone markets are clearly experiencing low growth. However, there is a trend of distributors expanding and even absorbing smaller units, which DGW will benefit from.

DGW is also venturing into office equipment, and there is significant room for growth due to economic development, business growth, and increasing foreign investment, all of which drive the demand for office equipment.

Moreover, there is a trend of investing in Data Centers in Vietnam due to the country’s advantage of low electricity costs. The Chairman of DGW believes that the company can take advantage of this trend as they have a wide range of products to offer, especially the upcoming server products from MSI.

Regarding the future growth rate of the main product categories, the Chairman of DGW projects that laptops and phones will grow at a rate of less than 10% per year over the next few years, while other categories will experience double-digit growth.

As for FMCG, there is a high potential for growth, and DGW is focusing on middle and high-income customers, a segment that is growing rapidly, leaving ample room for expansion in the FMCG sector.

Huy Khai