FRT Update – OUTPERFORM

The company reinforced its outstanding growth stream on the back of Long Chau (LC)’s ongoing scale-up and profit increase while the ICT chain has little voice because of negligible and volatile profit. We revise our EAT projection for 2026 up by 33% to VND1,850bn (+88% YoY), considering the 1H2026 beat. Our target price is VND158,800/share by YE2026, 5% lower than the prior update given elevated cost of equity, equivalent to a total return of 10.6%. Rating OUTPERFORM.

A dual surge in net revenue and earnings, with faster EAT fueled by heightened operating efficiency in 1H2026. Net revenue and EAT rose by 37.2% YoY and 187% YoY in 2Q2026, bringing 1H results to VND30,743bn (+33.3% YoY) and VND825bn (+123% YoY), respectively.

LC is still the engine. Scale up. Profit up. Net revenue rose by 39% YoY in 2Q2026 and 34% YoY to VND21,356bn in 1H2026, while EAT rocketed 94.2% YoY to VND808bn in 1H2026 (ACBS’s estimate). The strong top-line performance primarily stemmed from the continued scale-up strategy; still, the more telling number is the improvement in average revenue per store in 1H2026 – mostly driven by increased bill counts – over the 4Q2025 and full-year 2025 averages, which added a healthy boost to its performance. Revenue growth together with strength across the remaining core operating aspects – improved gross margin and operating efficiency YoY – facilitated its profit leap.

The ICT chain FPT Shop stayed lackluster – 2Q turned marginally profitable YoY but fell sharply from 1Q2026. Strong sales and operating efficiency gains YoY were insufficient to generate meaningful profit, weighed down by higher financial expenses and a thinner gross margin.

Strong 1H performance support our projections that the company will likely far exceed its full-year targets. We expect the company’s net revenue at VND64,312bn (+25.9% YoY) and EAT at VND1,850bn (+88% YoY) in 2026. These stunning rates may not persist in the next 1-2 years as LC’s profit base has been growing; however, decent growth of around 20% is still expected, driven by LC’s widened profitability, with efficiency gains on store sales advances and network expansion. Broader product range – prescription, specialty, and rare medicines, plus new healthcare partnerships – remains LC’s targets to lift revenue per store and defending its lead amid competition.