3Q2026 deceleration was primarily driven by the core global IT services segment experiencing a weaker momentum in Japan, its largest market, while lower signed revenue further shadowed the picture. JPY weakness, base effect and smaller deal sizes may be among the factors; still, delays in some clients have also been felt. Although the reasons have yet to be fully understood, preliminary observations prompt us to adopt a more conservative growth prospect for Japan and global IT services in 2027. We revise our 2027 EBT forecast down 3%, to VND13,025bn (+10.6% YoY). Move target price of VND75,700/shr by YE2027, suggesting an expected total return of 55.2%. Rating BUY.

A solid headline over a weaker quarter. 3Q2026 revenue rose 12.1% YoY and EBT rose 15.0% YoY on a like-for-like basis (LFL; FPT Telecom as an associate), bringing 9M growth to 12.4% and 17.0% YoY (to VND40,023bn/VND8,770bn). The numbers hold up, but the core business – global IT services – lost steam in the quarter.

The Japanese market is the epicenter. The global IT revenue growth of 8.2% YoY in 3Q2026 reflected mixed monthly performance. Slowdown in the Japanese market (+8.3% YoY in VND in 3Q) captured most of the results, partially explained by JPY depreciation while delays in some clients do matter. While continuing to investigate the causes besides currency impacts, the company suspects some factors including recent rate increases in Japan and a pause to review the transformation after years of investment.

BOJ Tankan signals sustained opportunities in Japan but sheds little light on the slowdown. The BOJ’s September Tankan survey shows Japanese firms still plan 10.3% software investment growth in 2026, above 2025’s 7.5%. The downward revision in September survey came almost from large firms, particularly the Food & Beverages industry, which are not FPT’s major clients. The survey may not necessarily reflect plans of FPT’s clients; however, it implies growth potential in Japan persists. FPT’s slowdown therefore looks more attributable to company-specific factors such as deal mix, project timing, currency impacts, market share, etc.

Signed revenue momentum softened; base effects faded and deal mix shifted. Signed revenue grew 3.6% YoY in 3Q2026, from 45.5% in 2Q and 22.2% in 1Q. In addition to the fading low-base effect that had supported growth in 2Q2026, deal mix shifted with mega deals (above USD1m) rising 105% YoY, contrasting with a decline in large deals (above USD10m), reversing the trend that had driven growth in 1H2026. Cumulatively, 9M2026 signed revenue still increased 23.1% YoY. Given the high comparative bases in the same periods last year, YoY growth could remain negative in October and December 2026.

We revise our 2027 EBT forecast down 3% to VND13,025bn (+10.6% YoY). Despite shaky growth in global IT services, a recovery in domestic IT services together with stable results from FPT Telecom (as an associate and there is currently no more update on changes in FPT’s stake) and well-performing FRT may support the company’s earnings. The stock is trading at TTM P/E of 9.3x (as at 11 Nov) and 2027F P/E of 8.9x, almost at the 3-year -2SD level (9.4x) and about half of the 3-year median.