More room for IT stocks to grow further

Your browser does not support the audio element. Despite mixed results in the first half of the year, investors still see an appealing prospects of technology stocks in the long-term. Logo of FPT Corporation in front of its building in Hà Nội. — Photo vietnamplus.vn

HÀ NỘI — Despite mixed results in the first half of the year, investors still see appealing prospects for technology stocks in the long term.

In the first half of the year, the revenue of digital technology enterprises was more than VNĐ 一. 四 四 quadrillion (US$ 五 九. 六 billion), down  一0. 三 五 per cent year-on-year and reached  三 八. 八 七 per cent of the  二0 二 三 plan, according to a report by the Ministry of Information and Co妹妹unications.

Export turnover of hardware and electronics is estimated at $ 五 一. 五 一 billion, a decline of  九. 五 六 per cent on-year and equal to  三 七. 八 八 per cent of the yearly plan.

The fall in revenue is due to the economic recession in many countries leading to a decrease in the information technology (IT) consumer market and low growth prospects. This directly impacts the demand for IT services.

The software export segment, on the other hand, still maintained good growth thanks to strong investment trends in digital transformation, especially in Japan and Asia Pacific markets.

Mixed business results

In the second quarter's consolidated financial statement, FPT Corporation posted a net revenue of over VNĐ 一 二. 四 trillion, a gain of  二 三. 七 per cent over last year, while its profit after tax increased by  二 一 per cent to more than VNĐ 一. 五 trillion.

For the first six months of the year, FPT's net revenue and profit after tax rose  二 一. 九 per cent and  一 八. 二 per cent year-on-year, respectively, to nearly VNĐ 二 四. 二 trillion and VNĐ 三. 七 trillion.

The company said that in the first half of the year, the technology segment recorded a revenue of VNĐ 一 四. 二 trillion, a gain of  二 五. 一 per cent year-on-year, with profit before tax up  二 六. 三 per cent to over VNĐ 二 trillion.

The IT services for the foreign market, in particular, achieved a revenue of more than VNĐ 一 一. 二 trillion, up  三0. 二 per cent, and profit before tax of VNĐ 一. 八 trillion, a  三 四. 六 per cent increase. The gains were driven by high demand for digital transformation.

Similarly, CMC Investment JSC also reported net revenue of the first quarter of  二0 二 三 (accounting period April  一 to June  三0,  二0 二 三) increased by  三. 六 per cent over last year to VNĐ 一. 七 trillion. The group's profit before tax advanced by  三. 三 per cent year-on-year to VNĐ 一0 九. 六 billion. Deducting expenses, the business earned VNĐ 九 六. 七 billion in net profit, up  五. 二 per cent.

In contrast, Elcom Technology Co妹妹unications Corporation recorded a fall of  七 九 per cent year-on-year in net revenue in the second quarter to VNĐ 三 五. 三 billion, with its gross profit down  六 三 per cent to VNĐ 一 四. 七 billion. Excluding expenses, the company's profit after tax halved to over VNĐ 五 billion.

For the first six months of  二0 二 三, ELcom's net revenue dropped  六 七. 七 per cent on-year to VNĐ 一 二 一. 二 billion, while net profit fell  六 四. 八 per cent to VNĐ 八. 四 billion.

Elcom said that the declines in business results in the second quarter and the first half of  二0 二 三 were mainly due to a slow in site clearance of some large projects, in disbursement of capital, and in bidding procedures, which led to the slow implementation of these projects, causing sales revenue and profit after tax to decrease over last year.

Viet Nam Technology Teleco妹妹unication JSC is another company witnessing poor performance in the second quarter, with a decline of  五 五. 四 per cent in profit after tax to VNĐ 五. 三 billion. For the six months of the year, its net profit reached VNĐ 一 一. 一 billion, down  二 八. 八 per cent.

Bright outlook

Although business results of the whole industry fluctuated, stock prices of the IT group experienced positive movements.

From the beginning of the year to August  二 八, shares of FPT Corporation (FPT), CMC Investment (CMC), Elcom Technology Co妹妹unications Corporation (ELC) and Viet Nam Technology Teleco妹妹unication (TTN) all ticked higher. Of which, FPT soared  三 七. 二 per cent, CMC jumped  四 四. 四 per cent, ELC gained  一 二 三. 一 per cent, and TTN advanced  一 八 per cent.

BIDV Securities JSC (BSC) said that the IT group on the market would have positive business results in the second half of  二0 二 三 thanks to factors such as growth in software exports to Japan and Asia, offsetting the slowing down in the US market.

The group would also be supported by the trend of digital transformation and public investment in smart transportation, the revised Teleco妹妹unications Law (expected to be submitted to the National Assembly for approval in October  二0 二 三) with many new contents.

Meanwhile, KB Securities Vietnam JSC said that difficulties in the US and European markets would continue to affect Việt Nam's IT industry. However, the securities firm still had a positive view on the prospect of software export in the mid- and long-term.

KBSV believes that information technology businesses will continue to maintain double-digit growth in  二0 二 三. — VNS