Enterprise

The DGW Chairman Confidently Targets 2024 Profit Plans, Despite a Modest 37% Achievement in H1

"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 confident in its ability to meet its annual targets. This optimism is fueled by the introduction of new products from renowned brands MSI and Xiaomi, as well as the anticipation of additional significant launches within the FMCG sector, which are expected to boost sales performance."

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 completing the 2024 plan

According to the plan shared by a representative of DGW, starting Q3 2024, the company will distribute new products from MSI such as 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.

Also, 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 phones for a while now. They have options to either upgrade to affordable smartphones – DGW is currently in talks 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 forecasts a revenue of VND 6,000 billion for Q3, an 11% increase compared to the same period last year, with a projected after-tax profit of VND 120 billion, an 18% increase.

Source: DGW

Looking at the full-year plan for 2024, the Chairman of DGW is confident in completing it, even though only 37% was achieved in the first two quarters.

“Usually, in the first half of the year, DGW achieves 40% of the full-year plan, but this year’s results are slightly lower. However, we remain confident in completing the plan with the momentum from new MSI and Xiaomi products, along with the expectation of new FMCG products to boost sales”, said Chairman Doan Hong Viet.

Purchasing power for phones and laptops in the second half of the year is not expected to be strong, while FMCG is projected to grow significantly

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

Regarding phones, according to unofficial information, the iPhone product line will be equipped with Apple Intelligence and feature larger screens and batteries for longer usage times. These are the key highlights. DGW plans to increase production for the iPhone 15 launch but not by a significant amount, as the fundamental demand is still weak.

In addition to iPhones, DGW also distributes products 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, it is clear that the markets for laptops and phones are 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 in this sector 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 advantage of low electricity costs, so some companies are bringing their Data Centers to Vietnam. DGW can take advantage of this trend as they have many products to offer, especially the upcoming server products from MSI.

Regarding the future growth rate of the current main industries, the Chairman of DGW projected that laptops and phones will grow at a rate of less than 10% per year over the next few years, while other sectors will achieve double-digit growth.

For FMCG, there is a high potential for growth, and DGW is focusing on the middle and high-income customer segments, which are growing rapidly, leaving ample room for FMCG growth.

DGW will promote the DCare brand

After the acquisition of 100% of the shares in B2X Vietnam, a company specializing in after-sales services with 18 professional warranty centers nationwide, along with DGW‘s own warranty center network called DCare, the Chairman of DGW has high hopes for the potential of the after-sales service system in the future.

According to the Chairman, this combination will help DGW strengthen its position in all industries related to electricity, electrical appliances, and after-sales services, including laptops, phones, TVs, and refrigerators. He also believes that having this system will enhance DGW‘s negotiating power with distributors.

“DGW will promote the DCare brand (a combination of B2X and the existing DCare) and expand the number of warranty centers from 18 to around 30-35, aiming to have a presence in major cities. This will also assist DGW in its strategy to work with Vietmoney to sell secondhand products”, shared the Chairman of DGW regarding their future plans.

Huy Khai