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Digiworld targets office equipment as growth driver

Released at: 08:22, 04/05/2019

Digiworld targets office equipment as growth driver

Photo: Hung Cao (VET)

Vietnamese electronics distributor expects office equipment revenue to exceed laptop revenue in 3 years.

by Khanh Chi

Benefiting from the government’s digital transformation program, the Digiworld Corporation (Stock code: DGW) announced its new growth strategies at its recent annual general meeting of shareholders in Ho Chi Minh City.

The company pinpointed certain product segments such as consumer goods and office equipment as growth engines, in which office equipment will take advantage of the trend towards digital transformation.

The draft “National Digital Transformation” project, of which the Ministry of Information and Communications is now seeking comment, sets out a general goal that Vietnam will be ranked among the top 4 in ASEAN in national digital ratings by 2025.

The specific goal of the project by 2025 is for its national competitiveness index to rank among the top 40 on the World Competitiveness Scoreboard from the WEF (by 2020 among the top 50); 50 per cent of SMEs to shift to digital platforms (reaching 10 per cent by 2020); the digital industry to account for at least 25 per cent of GDP (15 per cent by 2020); and at least 80,000 digital technology enterprises to be established (35,000 by 2020).

According to the IDC Spending Guide, global digital transformation spending will be approximately $2 trillion by 2022 and digital transformation investment will increase in all three areas: hardware, software, and services. In particular, investment costs for hardware and services will account for more than 75 per cent of the cost of digital transformation this year.

This trend will promote growth in the office equipment sector, including servers and clients, power solutions, IoT, network solutions, software, and cloud computing.

The company last year signed up with EATON, the world’s leading energy management group, on effective energy management solutions. It also signed up with Synopsys, a software company. Digiworld also officially become a master distributor of Nestlé’s nutrition products this year.

“Digiworld’s growth is almost guaranteed by two new contracts signed at the end of 2018 and early 2019 with Nokia in mobile phones and Nestlé in consumer goods,” said Mr. Doan Hong Viet, CEO of Digiworld. “With a vision of becoming a billion-dollar company, the greater challenge for the executive board is to make the office equipment sector become a growth pillar in ICT as well as to make sure of the sustainable development of the consumer goods business.”

“I believe that with the irreversible trend towards digital transformation, the office equipment segment will achieve a compound average growth rate (CAGR) of 25 per cent and will even exceed the laptop segment in the next three years. The consumer goods business will also gain further breakthroughs in the future.”

Revenue in the first quarter of 2019 stood at nearly $59 million, up 8 per cent year-on-year, and after-tax profit was $1.054 million, up 26 per cent. The company has therefore completed 19 per cent of the 2019 revenue plan and 18 per cent of the 2019 after-tax profit plan.

In the office equipment segment, revenue reached $11.5 million, increasing 19 per cent year-on-year and representing 19 per cent of the annual plan, while revenue in consumer goods reached $2.28 million, increasing 141 per cent, equal to 15 per cent.

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