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FRT Update – NEUTRAL
10/02/2025 - 1:59:31 CHFPT DIGITAL RETAIL JSC (FRT VN)
The company generated 26% YoY revenue growth and VND527bn of EBT (from a loss in 2023) in 2024, in line with our projections. Long Chau sustained its role as the mainstay of the company, though the FPT Shop chain saw some improvements. We slightly revise 2025 EAT projection down by 4% due to a higher-than-expected effective tax rate. Our target price by the end of 2025 is VND185,000/share, 4% lower than the prior update. Rating NEUTRAL.
FRT announced net revenue of VND11,448bn (+31.7% YoY) and EBT of VND169bn (vs. a loss YoY) in 4Q2024. On a cumulative basis, (unaudited) net revenue rose by 25.9% YoY to VND40,104bn and EBT achieved VND527bn in 2024 (2023: -VND294bn).
The FPT Shop chain, capturing 38% of FRT’s sales, returned to profit with EBT of VND169bn (2023: -VND475bn), on the back of financial profit and a better operating result. Nevertheless, its revenue contracted by 6.5% YoY (including 6.5% YoY growth in 4Q) to VND15,126bn in 2024, with 634 stores (-121 YoY) in operation at the end of the year.
The Long Chau chain (LC) continued to prop up the company’s revenue and earnings growth. Accounting for 62% of FRT’s sales (including negligible contribution of vaccination centers), we estimate the chain delivered 59.5% YoY growth in revenue to VND24,978bn, bolstered by robust network expansion, and 98.2% YoY in EBT to VND358bn in 2024. At YE2024, there were 1,943 pharmacies (+446 YoY) and 126 vaccination centers (+116 YoY) in operation.
The company’s gross margin widened to 18.9% in 2024 (2023: 16.2%), fueled by a rebound in FPT Shop’s margin. The net debt to equity ratio improved albeit still high at 299% vs. 372% in 2023.
For 2025, we project that the company may generate VND46,649bn of net revenue (+16.3% YoY) and EBT of VND710bn (+34.7% YoY). Our target price for FRT by the end of 2025 is VND185,000/shr, equivalent to a total return of -1.3%.
