DGW – Preparing to ride the wave of ICT recovery in 2024
- Q4-2023, DGW's net revenue and NPAT-MI gained VND 4,849 bn (or USD 203 mn, -10.4% QoQ, +19.0% YoY), and VND 90 bn (or USD 3.8 mn, -12.5% YoY, -42.5% QoQ), respectively, resulting in 2023 EPS of VND 2,121. In general, ICT demand remained weak in Q4, and this result only reflected the seasonal nature of ICT business: the surge of Mobile Phones based on iPhone season and the drop of Laptop & Tablets after “back-to-school” period.
- In 2024, we expect DGW to improve both revenue and NPAT, driven by the recovery from a low base in 2023. However, ICT market has been saturated for years, making it difficult to create breakthrough growth. Therefore, DGW's middle-term prospects are closely tied to its ability to scale-up new business models.
- DGW stock is trading at a trailing P/E of 27.2x - higher than DGW‘s 5Y-Average P/E (12.8x). We believe that expectations about the recovery in both DGW's revenue and NPAT have been fully reflected in the stock price’s movement. We recommend that investors monitor the transformation of ICT purchasing power in the upcoming quarters to make an efficient decision to DGW shares.
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