A corner of PC products at an FPT Shop. FPT Retail (FRT)'s profit also peaked in the fourth quarter of 2021 thanks to unusually high laptop sales, but in the fourth quarter, profit may decrease. ( Photo courtesy of FPT Shop) In the information technology and home electronics (ICT and CE) segments, Digiworld (DGW) announced a 20% increase in net profit in the second quarter of this year, much lower than the 97% increase in the first quarter.
Mobile World Group (MWG) reported a 2% increase in revenue from the ICT and CE segments in May, much lower than the 20-22% increase from February to April.
Digiworld's profit growth peaked in the fourth quarter of 2021 thanks to unusually high laptop sales, but the fourth quarter profit growth is likely to be negative. In 2023, DGW's profit may still increase due to more contributions from newly signed contracts, such as Whirlpool and Joyoung brand home appliance distribution contracts. Revenue from existing contracts may continue to increase as Xiaomi mobile phones continue to penetrate the market and iPhone selling prices continue to increase every year.
FPT Retail (FRT)'s profit also peaked in the fourth quarter of 2021 thanks to unusually high laptop sales, but in the fourth quarter, profit may decrease. FRT’s profit can still increase in 2022, although very little, thanks to increased market share in the retail ICT industry and pharmacy chain. Thanks to its experience in the pharmaceutical retail business, FRT’s Long Chau pharmacy brand will continue to gain market share from retail drug stores.
Mobile World Group (MWG) will also see profits rise thanks to increasing market share in ICT and CE segments, although the growth is relatively low. MWG's profit growth in 2023 depends on the success of its retail chain Bach Hoa Xanh's (BHX) restructuring in the second and third quarters of this year. If the restructuring is successful, future profit growth could catch up with pre-pandemic growth at 30-40%, as in the 2017-2019 period.
According to SSI Research, the revenue growth in the second half of the year for the ICT & CE segment will be larger than the growth in the first six months. For companies with a high share of laptop sales in total revenue, such as FPT Retail and Digiworld, revenue growth is likely to be in the single digits in the second half of 2021 due to the chip shortage problem.
In 2023, SSI Research has forecast flat revenue for the ICT segment and single-digit growth for the CE segment. Larger companies will gain more market share through strong bargaining power with suppliers, allowing them to mitigate the impact of rising costs and thereby offer more discounts to support customers in the context of inflationary pressure.
In the jewellery segment, although the challenging inflationary environment may negatively affect the demand for gold jewellery in the last six months of 2022, the revenue growth of jewellery companies still benefits from the post-COVID-19 recovery.
In 2023, a large-scale economic slowdown will put pressure on gold demand, but the impact and persistence of inflation in Việt Nam will be the decisive factors for the consumption of high-income people on non-essential goods such as jewellery, according to SSI Research. Therefore, demand in 2023 is unlikely to exceed pre-COVID-19 levels.
Inflation and recession will negatively affect spending on non-essential items. Low-income people are affected first, while spending on non-essential items by high-income people remains stable. However, if inflation and recession persist, the spending of high-income people will also suffer.
According to SSI Research, Phu Nhuan Jewelry (PNJ) may achieve the highest growth in profit in 2022’s third quarter. It made a loss in the third quarter of 2021 as it had to close many stores due to strict social distancing measures./.
Mobile World Group (MWG) reported a 2% increase in revenue from the ICT and CE segments in May, much lower than the 20-22% increase from February to April.
Digiworld's profit growth peaked in the fourth quarter of 2021 thanks to unusually high laptop sales, but the fourth quarter profit growth is likely to be negative. In 2023, DGW's profit may still increase due to more contributions from newly signed contracts, such as Whirlpool and Joyoung brand home appliance distribution contracts. Revenue from existing contracts may continue to increase as Xiaomi mobile phones continue to penetrate the market and iPhone selling prices continue to increase every year.
FPT Retail (FRT)'s profit also peaked in the fourth quarter of 2021 thanks to unusually high laptop sales, but in the fourth quarter, profit may decrease. FRT’s profit can still increase in 2022, although very little, thanks to increased market share in the retail ICT industry and pharmacy chain. Thanks to its experience in the pharmaceutical retail business, FRT’s Long Chau pharmacy brand will continue to gain market share from retail drug stores.
Mobile World Group (MWG) will also see profits rise thanks to increasing market share in ICT and CE segments, although the growth is relatively low. MWG's profit growth in 2023 depends on the success of its retail chain Bach Hoa Xanh's (BHX) restructuring in the second and third quarters of this year. If the restructuring is successful, future profit growth could catch up with pre-pandemic growth at 30-40%, as in the 2017-2019 period.
According to SSI Research, the revenue growth in the second half of the year for the ICT & CE segment will be larger than the growth in the first six months. For companies with a high share of laptop sales in total revenue, such as FPT Retail and Digiworld, revenue growth is likely to be in the single digits in the second half of 2021 due to the chip shortage problem.
In 2023, SSI Research has forecast flat revenue for the ICT segment and single-digit growth for the CE segment. Larger companies will gain more market share through strong bargaining power with suppliers, allowing them to mitigate the impact of rising costs and thereby offer more discounts to support customers in the context of inflationary pressure.
In the jewellery segment, although the challenging inflationary environment may negatively affect the demand for gold jewellery in the last six months of 2022, the revenue growth of jewellery companies still benefits from the post-COVID-19 recovery.
In 2023, a large-scale economic slowdown will put pressure on gold demand, but the impact and persistence of inflation in Việt Nam will be the decisive factors for the consumption of high-income people on non-essential goods such as jewellery, according to SSI Research. Therefore, demand in 2023 is unlikely to exceed pre-COVID-19 levels.
Inflation and recession will negatively affect spending on non-essential items. Low-income people are affected first, while spending on non-essential items by high-income people remains stable. However, if inflation and recession persist, the spending of high-income people will also suffer.
According to SSI Research, Phu Nhuan Jewelry (PNJ) may achieve the highest growth in profit in 2022’s third quarter. It made a loss in the third quarter of 2021 as it had to close many stores due to strict social distancing measures./.
VNA
