IR Newsletter 4th Quarter 2020

2020 has been a challenging year not just for Viet Nam but also the rest of the world with the outbreak of COVID-19 and resulting economic hardship. However, Digiworld had remained growth and been one of the brightest companies with a growth record in Q4 as follows:
• 4Q20 Net revenue: reached VND 4,017 bn, soaring 61% YoY.
• 4Q20 Profit after tax: reached VND 85 bn, advancing 70% YoY.
Details are as follows:
– Laptops & tablets
After completing 2020 plan in Q3, this segment continued to grow strongly in Q4 by 66% YoY, reached VND 1,199 bn, and exceeded 38% revenue plan, thanks to the revenue contribution of current brands and 2 new ones, Apple and Huawei.
– Mobile phones
Revenue reached VND 2,228 billion, up 68% YoY thanks to the steady increase in Xiaomi’s market share and the revenue contribution from Iphone Series of Apple.
– Office equipment
Vietnam has done well to control the spread of the Covid-19 pandemic, businesses increased expenditures for office equipment. Moreover, IoT products are increasingly diversified, convenient, and favored by consumers. This segment revenue recorded a 36% increase over the same period, reached VND 509 billion.
– Consumer goods
This segment revenue only fulfilled 53% of the 2020 plan as this is the sector most affected by Covid-19. However, in Q4, revenue of this segment grew back with 11% YoY, reached VND 81 bn, thanks to the signed contracts with Nestlé and the cooperation with Italian partner to distribute of Osteoarthritis medicine.
With the Q4 business results as above, the 2020 total net revenue reached VND 12,535 bn and profit after tax reached VND 253 bn, a year-on-year increase of 48% and 56%, respectively, equivalent to trailling EPS of VND 5,880.
As a result, Digiworld has achieved 123% revenue goal and 125% profit goal for the year 2020.
– Cash and cash equivalents: Quarter-end balance reached VND 878 bn, significantly higher than the amount of cash in the same period in 2018 and 2019, this is the result of good business performance and improvement of cost management, also a positive sign for DGW’s short-term liquidity.
– Operating ratios: DGW recorded a breakthrough in working capital management. Specifically:
+ Receivable days is currently only 21 days, significantly improved thanks to the efficiency of tightening up debt collection policy.
+ Inventory days also recorded a decrease to 19 days. This proves that Digiworld had high inventory turnover during 4Q20.
+ Payable days up to 18 days, proves that DGW’s strength to suppliers has also improved steadily over the years. Strong business growth has made distributors such as Xiaomi, Apple, Dell, Asus, Acer, etc. more confident in DGW’s sales capacity, so the debt policy of these suppliers with DGW is also loosened year to year, improved DGW cash flow management.
– Profitability ratios: At the end of 4Q20, Digiworld recorded a positive profitability ratio:

+ Gross profit margin remained at a good rate of 6.3%, although there was a slight decrease due to the strong growth of Mobile phones segment and the slow growth of good profit margin segment – Consumer goods that was impacted by Covid-19.
+ Net profit margin was improved to 2.12%, which is the result of restructuring general & administration expenses and selling expensesn.
Especially, ROE in 4Q20 continued to reach a record at 7.4%.
– Capital structure: In 4Q20, DGW still kept a safe and stable debt ratio with an average debt / equity ratio of 0.55, significantly lower than previous years, thanks to efficient business helped DGW to have higher retained earnings added to equity.
Laptops & Tablets is expected to continue growing with contributions from Huawei and Apple..
Mobile phones is expected to see strong growth thanks to Xiaomi models, new launching Iphone 12 Series and the higher demand in Tet Holiday.
Office Equipment: with the trend of digital transformation and the control of the covid-19 pandemic, revenue from this segment will be on the process of development.
Consumer goods: DGW has distributed health care products from Italy since the end of December, it is expected to contribute more to Digiworld’s revenue in 1Q21.
Thus, with the above growth prospects, Digiworld expects Q1 revenue will reach VND 4,000bn and profit after tax will reach VND 83 bn, equivalent to an increase of 73% and 84% YoY.

Macbook Air M1

 Most advanced graphics processor and fastest integrated graphics
– Magic Keyboard: do everything faster and more efficiently
– One Touch ID: fast, easy authentication for secure logins

Retail price: VND28,990,000

Xiaomi Redmi 9T

– The Snapdragon™ 662 octa-core processor delivers high performance
– 48MP AI quad camera
– Splash-proof: For safe usage in all weather conditions
– At less than 200g, massive 6000mAh (typ) battery

Retail price: VND4,990,000
Huawei FreeBuds Pro
– Intelligent dynamic active noise cancellation
– Smart control at your fingertips
– Wireless high-quality recording
– Can be connected with two devices simultaneously

Retail price: VND4,490,000 
Mi Watch
– 1.39-inch 326 ppi high-resolution display
– 16-day ultra-long battery life
– 24-hour heart rate monitor, blood oxygen testing
– 12nm high-end GPS chip
Retail price: VND3,490,000
Mi Watch Lite
– Up to 9 days of battery life, 100% charge in 2 hours
– 5 ATM water resistance up to 50m
– Professional health monitoring, keep track of your physical condition
Retail price: VND1,990,000
As one of the leading ICT distributors in Vietnam, Digiworld is constantly looking for opportunities to cooperate with major technology manufacturers in the world.
Digiworld and Huawei have cooperated since 2Q20. On January 6, 2021, the partnership has been boosted to the next level that DGW and Huawei have successfully signed a strategic cooperation.
Accordingly, Digiworld will be the only entity in charge of market expansion services for Huawei in the Vietnamese market.
4Q20 Consolidated Financial Statement (available on January 29, 2021)
Impressive business result in the fourth quarter, Digiworld achieved revenue exceeding expectations

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