IT distribution major Digiworld records net profit for two consecutive quarters

Vietnam’s Digiworld Corporation, which distributes IT products, earned revenues and net profits of VND5,020 billion ($198 million) and VND90 billion ($3.6 million), up 9% and 8% year-on-year respectively, in Q2/2024.

Digiworld, listed on the Ho Chi Minh Stock Exchange as DGW, said in a report that it was the second consecutive quarter that the company recorded positive profit growth compared to the same period last year. It did not elaborate.

It said revenue from laptops and tablets grew 20% year-on-year, although Q2 saw a “low point” for this segment. It attributed this growth to the product renewal cycle as well as the launch of a series of AI-integrated laptops.

Revenues from the home appliance segment also grew by 20% year-on-year.

Digiworld estimates H1/2024 revenues and net profits of VND10,005 billion ($395 million) and VND182 billion ($7.2), up 17% and 12% year-on-year, respectively.

For 2024 as a whole, the firm has an ambitious business plan with net revenue and net profit targets of VND23,000 billion ($909 million) and VND490 billion ($19.4 million), up 22% and 38% year-on-year, respectively.

In H1/2024, it has achieved 43.5% and 37% of the year's revenue and profit targets, respectively.

Digiworld struck a notable M&A deal recently by acquiring 75% of Achison, a company specializing in providing labor protection equipment. The industrial equipment and labor protection industry is considered to have a lot of potential because of Vietnam becoming an increasingly attractive FDI destination, the firm stated in the report.

Broker DSC Securities expects that with a strategy to expand its labor protection product portfolio, Achison can continue to expand its market share, contributing more to Digiworld's revenue structure.

Besides this, Digiworld had announced another M&A deal in Q1/2024 involving the Vietmoney chain, which is expected to help the firm exploit the potential of second-hand products and stimulate customer spending.

In a recent report, DSC Securities said that in 2024, especially in H2 of the year, the information and communications technology products will see a “clearer” recovery thanks to the product replacement cycle that usually takes place after 2.5-3 years.

The launch of a number of new technology products and the back-to-school season will also stimulate demand for electronic devices, it said.