Tech-product distributors, retailers see strong rebound in July

August, 16/2022 - 08:21
Mobile phone and laptop distributors and retailers reported good revenue and profit in July, showing that business activity of companies operating in this field are on the rebound from the COVID-19 pandemic.
Customers choose laptops at an electronics store in the southern province of Bà Rịa-Vũng Tàu. VNA/VNS Photo Hoàng Nhị

HÀ NỘI — Mobile phone and laptop distributors and retailers reported good revenue and profit in July, showing that the business activity of companies operating in this field is on the rebound from the COVID-19 pandemic.

However, analysts said that the increase in inflation will negatively affect consumer spending, and the sales growth of distribution and retail businesses of phone and laptop products may not be as high as per initial expectations.

According to surveys by Bảo Việt Securities JSC (BVSC), leaders of Digital World JSC (DGW) and PetroVietnam General Services JSC Corporation (PET) - the two big laptop and mobile phone distributors in Việt Nam, they all saw signs of recovery in the demand for laptops and mobile phones in July.

The revenue from laptop sales of DGW in the month increased by 5 per cent over the same period last year, and is forecast to continue recovering in August and September. Meanwhile, mobile phone revenue surged 105 per cent year on year as consumption last year was heavily affected by pandemic-induced restrictions.

PET also confirmed the same trend although it has not yet released its preliminary business data for July.

According to BVSC's estimates, mobile phone revenue in the second quarter of 2022 in Việt Nam increased by 15.2 per cent year-on-year, reaching VNĐ26.8 trillion (US$1.145 billion), but was down VNĐ4.2 trillion compared to that reported in the first quarter.

Việt Nam’s mobile phone revenue is estimated to grow 13.4 per cent year-on-year in the first half of 2022 to VNĐ57.9 trillion.

However, according to SSI Securities JSC (SSI), inflation has affected purchasing power, forcing consumers to cut spending on non-essential items from the second quarter of 2022.

SSI forecasts that big companies will gain more market share thanks to their strong bargaining power with suppliers, allowing them to mitigate the impact of the higher cost of goods and thereby offer more discounts to customers in the context of inflationary pressure.

After the sharp increase in the first quarter of 2022, laptop sales in the second quarter of 2022 weakened due to a decline in demand.

The revenue of Digital World Joint Stock Company in Q2 reached VNĐ1.13 trillion, down 15 per cent over the same period last year and down 49.8 per cent compared to the first quarter of 2022.

PetroVietnam General Services Joint Stock Company reported revenue in the second quarter of 2022 reached only VNĐ434 billion, down 51.9 per cent over the same period last year and down 68.4 per cent compared to the first quarter.

Laptop sales in Q2 of FPT Digital Retail Joint Stock Company (FRT) decreased by 0.9 per cent over the same period last year to VNĐ879 billion. This number also decreased by 38.1 per cent compared to the first quarter of 2022.

Profit of Digital World Joint Stock Company (DGW) peaked in the fourth quarter of 2021 thanks to unusually high laptop sales.

In 2023, corporate profits may still increase due to more contributions from newly signed contracts and revenue from existing contracts may still gain.

The profit of FPT Digital Retail Joint Stock Company (FRT) also peaked in the fourth quarter of 2021, thanks to unusually high revenue from notebook computers, hence Q4 profit of 2022 may decline from last year's high.

Businesses can still see increased profits in 2023 thanks to increased market share in the information and communication technology (ICT) retail industry.

Mobile World Investment Joint Stock Company (MWG) can also see increased profits thanks to increasing market share in information technology and consumer electronics (ICT and CE).

On the stock market, along with business results dropping in the first half of the year and the decline of the stock market, shares in the retail distribution of phones and laptops also fell deeply.

Mobile World Investment Joint Stock Company (MWG) is priced at around VNĐ63,000 per share, down 54.2 per cent compared to the beginning of the year. FPT Digital Retail Joint Stock Company (FRT) fell 11 per cent, Digital World JSC (DGW) fell more than 93 per cent. PetroVietnam General Services JSC Corporation (PET) was the most active stock in the group with a slight increase of 4.6 per cent. VNS

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