DQC tell shareholders of restructuring plans
DQC tell shareholders of restructuring plans
Dien Quang Lamp JSC (DQC) will restructure towards a more technology-based model this year, with member companies operating under an autonomous model in the five areas of lighting, intelligent control, electrical appliances, household appliances, and solar energy.
The plan was agreed to at its 2023 shareholder meeting, held on April 12. It was also agreed to change the company's name to Dien Quang Group. DQC has focused more on lighting solutions in recent years, from its origins as a light bulb manufacturer.
DQC also agreed a target of double-digit growth in consolidated net revenue and pre-tax profit for the year. The company hopes to achieve net revenue of VND1.2 trillion ($51 million), and a pre-tax profit of VND20 billion ($850,000), up 21 per cent and 27 per cent on-year, respectively.
The company set these targets based on the general world economic forecast. The Vietnamese economy, in particular, is expected to face many challenges this year, as the real estate market has come under pressure from high-interest rates and outstanding loans.
Due to this, businesses supplying the real estate industry have been heavily affected by bloated inventories and mounting debt. DQC, as a supplier of lighting solutions and electrical equipment, is among those affected.
By the end of the first quarter of 2023, DQC's revenue was estimated to have decreased by 3-4 per cent on-year. The management board has envisioned that the second quarter will also underperform. However, the board anticipates an improvement in the third quarter onward.
In 2022, DQC’s net revenue was VND990 billion ($42 million), up 35 per cent on-year. However, its after-tax profit fell 36 per cent on-year to VND16 billion ($680,000).
To ensure sufficient working capital, DQC will not pay dividends for 2022. Speaking more about this decision, Chairman Ho Quynh Hung said, "The most pressing concern for the company in 2023 is cash flow, so the company has decided to retain profits."
The dividend is expected to be 5 per cent in the coming year. Hung explained the low dividend to shareholders, saying the company is still in the investment stage. “If you want to reap the fruits of the harvest, investors will have to wait until 2025,” he said.
The meeting also saw the appointment of Tran Quoc Toan as the new CEO of the company. Born in 1971, Toan is a graduate of the Ho Chi Minh City University of Technology. After graduating in 1998, he joined DQC and has held many important positions. The position of CEO at DQC has been vacant since September 2020, after Ho Quynh Hung resigned from the post he had held since 2010.
