Digiworld Corporation (Stock code: DGW) has surpassed hundreds of listed enterprises with medium capitalization to reach the Top 5 enterprises with the best corporate governance in 2019.

Proud of SAP ERP management system

Mr. Doan Hong Viet, Chairman of the Board of Directors (BOD) and General Director of Digiworld shared that good corporate governance is aimed at the goal of sustainable development. Digiworld proactively applies the best corporate governance practices to maximize business efficiency, as well as harmonize the interests of stakseholders.

According to the assessment of the Corporate Governance Report Voting Council in the 2019 Listed Enterprise Voting, the important benefits of good governance are reducing risks, increasing transparency, and increasing commitment, thereby increasing trust of investor and market in the business. The results show that companies with good governance have higher stock prices than companies with poor governance. Companies with high governance scores also have higher stock price-to-book value ratios than companies with low governance scores.

Digiworld is proof. In the third quarter of 2019, the Company achieved revenue of 2,615 billion VND, an increase of 50% and profit after tax of 52 billion VND, an increase of 42% compared to the same period last year. This achievement comes from the growth of all the Company's product lines: Laptop and tablet industry increased by 32%; The mobile phone industry increased by 80% thanks to the launch of many new phone models; Office equipment industry with strong digitalization trend has promoted growth of 29%; Most impressively, the fast-moving consumer goods industry increased by 560%. With good business results and management activities, DGW shares have had many price increases in the market.

Accumulated in the first 9 months of the year, Digiworld achieved VND 5,992 billion in revenue, an increase of 37%; Profit after tax was 112 billion VND, up 44% over the same period last year; Completed 84% of the revenue plan and 82% of the profit plan in 2019. The gross profit margin improved significantly each quarter, of which, the third quarter reached 6.9%. This is a great achievement of Digiworld after a period of struggling to "overcome the storm" when the mobile phone market experienced a big change - Nokia, a 150-year-old brand, collapsed from its peak - which was a segment that contributed a large proportion of Digiworld's total revenue.

Behind the above growth numbers is the correct vision and strategy of Digiworld's Board of Directors and a good corporate governance foundation. Mr. Viet said that for the Company to operate effectively and proactively with developments in the market, it is necessary to focus on risk management in business lines and have appropriate management methods.

For a service business like Digiworld, the issues that need good management focus are logistics and finance. Therefore, since the 2000s, Digiworld has been interested in investing in the SAP ERP management system and is now proud to be one of the Vietnamese enterprises that successfully operates a standard SAP ERP system. This perseverance has brought Digiworld to a new level, while traditional distributors still operate manually, helping the Company optimize costs, thereby increasing profit margins, especially financial transparency, reporting data is updated continuously and independently.

The 2018 annual report shows that Digiworld clearly and transparently presents aspects of management, in which the risk management content is detailed, accompanied by strategies and solutions to minimize risks, with the supporting tool being the SAP ERP system.

For example, thanks to a clear working process and SAP ERP management system, Digiworld can evaluate the purchasing power of each distribution channel and the life cycle of inventory goods to have an investment plan or expedite goods delivery, as well as identify problems with customer debt management, cash flow or delivery and return processes...

As of September 30, 2019, the Company's inventory decreased by 36% compared to the beginning of the year, down to 838.6 billion VND; Inventory turnover was at 2.7 times in the third quarter, a sharp increase compared to 1.2 times in the first quarter; Liabilities decreased by 20.6% compared to the beginning of the year, down to 1,155 billion VND, of which most are short-term debt.

Enhance the role of the Board of Directors

Ranked in the Top 5 businesses with the best corporate governance in 2019 in the mid-cap group, one of the plus points for Digiworld is respect for investors and stakeholders through corporate announments about its activities, important actions of the business, in terms of corporate governance in a timely and transparent manner, demonstrated through the diversity of content disclosing governance information on the Company's website, the periodic disclosure of information is emphasized and on time.

More importantly, in a business environment that is changing rapidly because of the strong development of technology - this is clearly shown in Digiworld's business lines of ICTs and consumer goods - the role and the Board of Directors' responsibility is even greater in building a sustainable development strategy for the enterprise. In particular, the diversity of the Board of Directors, reflected in the increase in diversity of expertise, experience, field/industry knowledge... becomes necessary.

Mr. Viet said that independent, non-executive members help Digiworld's Board of Directors have different perspectives, while adding professional strengths to the Company's development strategy. For example, Mr. Tran Bao Minh, an independent member of the Board of Directors, has extensive experience in the field of marketing, especially in the consumer goods industry - a new and important product industry of Digiworld - has made many proposals to promote activities and enhance product recognition in the market, contributing to increased revenue. As for Mr. Doan Anh Quan, a non-executive member of the Board of Directors, with extensive experience in the field of diplomacy, he gave many opinions and suggestions on cooperation and working with partners and investors domestically as well as abroad.

In addition, Digiworld gradually applies good practices such as establishing specialized committees, supporting the activities of the Board of Directors more effectively such as the Investment and Development Subcommittee, and preparing to establish a Human Resources and Development Subcommittee in the future. Remuneration, aimed at building a healthy corporate culture, following Digiworld's core values and developing human resources to serve the Company's future growth.

For listed companies leading in corporate governance, the content of the role of the Board of Directors has achieved many positive results. Prominent is the move to separate supervisory and executive roles in the governance structure, whereby many businesses make the Chairman of the Board of Directors not concurrently the CEO (2020 is the year of mandatory application).

Regarding this issue, Mr. Viet shared: "As Chairman of the Board of Directors, I only have 1 vote out of 5 votes of Digiworld's Board of Directors. This means, the chairman is not necessarily the largest shareholder, or the founder of the company. Meanwhile, the role of the CEO focuses on planning strategies for submission to the Board of Directors for approval, as well as organizing the implementation of those strategies.

Digiworld's awards for transparency and sustainable development:

- Top 5 best corporate governance of medium-capitalization enterprises of the 2019 Listed Enterprise Voting.

- 4 consecutive years winning VCCI's Sustainable Development Enterprise award.

- 3 consecutive years in the Top enterprises with the most transparent shareholder relations and corporate announments, voted by both individual investors and financial investors.