- We increase our target price (TP) for DGW by 28% but downgrade our rating from BUY to OUTPERFORM as the stock has rallied 60% over the past three months.

- Our higher TP is mainly driven by extending our explicit forecast horizon to 2028 from 2027. Given DGW’s recent successes in acquiring distribution deals in higher value-added products apart from ICT (i.e., consumer goods, smart home appliances and industrial consumables) over the past year, we now have a more optimistic outlook that DGW will achieve higher revenue stream and more sustainable margins over the medium to long term. 

- We anticipate that an increasing number of international brands entering Vietnam will support growth in demand for market expansion services provider like DGW over the longer term. In the medium term, we believe DGW will reap rewards of the expected recovery in ICT consumption in 2024F-25F. We keep our 2023F-25F aggregate NPAT-MI forecast relatively unchanged.

Powered by Froala Editor