DGW - Growth to be fueled by adding new brands & acquisition activities

Q1 2024 preliminary results:

DGW announced its Q1 2024 results with total revenue of VND4.99tn (USD199.4mn/+26% YoY) and NPAT increasing 16% YoY, reaching VND92bn (USD3.7mn). The company witnessed growth across several sectors, with standout performances in mobile phone revenue (+29% YoY) and office equipment (+48% YoY).

Summary of key AGM resolutions:

2024 guidance: Revenue of VND23tn (+22% YoY) and NPAT of VND490bn (+38% YoY), equivalent to 107% and 104% of our respective full-year forecasts.
FY 2023 cash dividend: VND500/share.
FY2023 stock dividend with a ratio of 30%.
FY 2023 ESOP: 2mn shares (1.2% issuance rate) at VND10,000/share; 1-year lock-up period.

Other information:

B2X Vietnam acquisition: In early 2024, DGW raised its ownership in B2X Vietnam from 49% to 100%. B2X Vietnam was a joint venture between Digiworld and B2X founded in mid-2017. Given 18 service centers across Vietnam, DGW can upgrade its quality after-sales service (including installation, repair, maintenance).
Vietmoney’s ownership raising: In October 2023, DGW raised its stake in Vietmoney, a nation-wide pawn shop chain to 72.8%. DGW expects Vietmoney to not only expand the pawn shops but also help DGW to enter second-hand electronic device selling. The potential second-hand electronic device business can also leverage on strong D-care capability (DGW’s after-sales service) Additionally, Vietmoney can also penetrate SME loans and other financial services. Per management, until now, Vietmoney has only reached the break-even point from the shop level.
Achison’s potential growth: According to DGW’s management, Achison accounts for 10% market share in the segment for branded personal protective equipment. Since Vietnam has become a manufacturing hub for this segment, there is ample headroom for Achison to gain market share from both branded and unbranded players. Additionally, DGW sets a target of VND1tn in net revenue and VND50bn in NPAT for Achison in 2024.