Digiworld (HOSE: DGW) | 2Q26 Update, BUY – Upside +34.0%

Margin Expansion Drives Earnings

DGW 2Q26 Performance

DGW reported an exceptionally quarter, with 2Q26 revenue of VND7,273bn (+26.9% YoY, -14.4% QoQ) and NPAT-MI of VND309bn (+166.4% YoY, +54.5% QoQ). 1H26 revenue and NPAT-MI reached VND15,773bn (+40.2% YoY) and VND509bn (+129.3% YoY), completing 52.4% and 74.3% of our FY26E forecasts, respectively.

2Q26 gross margin (GPM) expanded to 13.0% (+4.5ppt YoY; +3.5ppt QoQ), driven by inventory gains as DGW monetized low-cost inventory amid surging memory prices. While memory prices are expected to remain elevated in 2H26, inventory gains should moderate as new purchases reflect higher replacement costs.

Earnings Forecast

We raised our FY26E revenue and NPAT-MI forecasts to VND33,692bn (+26.5% YoY) and VND859bn (+57.0% YoY), respectively, following robust Laptop & Tablet and Office Equipment performance in 1H26. We also raise our FY26E GPM assumption to 10.1% (from 8.7%), reflecting inventory gains from low-cost inventory. For FY27, we forecast revenue of VND 37,597bn (+11.6% YoY) and NPAT-MI of VND 936bn (+9.0% YoY), with GPM nomalizing to 9.39 % as inventory gain fade.

Target Price and Rating

We also updated key macro assumptions to reflect current rising cost of funding.  Our new TP arrived at VND 53,600/share (from VND 50,100/share), implying 34.0% upside from the closing price of VND 40,000/share on 6 August 2026. We therefore upgrade our recommendation to BUY from ADD.

DGW currently trades at just 10.4x TTM P/E and 10.1x FY26E P/E, well below the industry average of 13.1x. DGW completed its FY25 cash dividend payment of VND 1,000/share on 14 May 2026. The company also announced a FY26 cash dividend of VND 3,000/share (7.2% yield), with the first tranche of VND 1,500/share payable in October 2026. DGW also planned to issue 2.2mn ESOP in 3Q26 (~0.99% of outstanding shares).