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FPT Update – NEUTRAL
21/02/2025 - 4:48:58 CHFPT CORPORATION (FPT VN)
The company sustained healthy growth in 2024 driven by solid performance of the global IT services segment. Looking forward to 2025, the vigorous outlook persists given 20% YoY EBT growth in our projection; however, the market price seems to have almost reflected the growth potential. Rating NEUTRAL with a target price at VND145,700/share by the end of 2025 (1% lower than the prior update).
FPT announced (unaudited) net revenue at VND62,849bn (+19.4% YoY) and EBT at VND11,071bn (+20.3% YoY) in 2024, in line with our expectations.
The global IT services segment [Revenue/EBT: VND30,953bn (+27.4% YoY)/VND4,770bn (+26.1% YoY)] continued to be the company’s key driver on the back of rosy growth in most of its major markets (e.g Japan, APAC, Europe). Revenue from digital transformation services jumped by 37% YoY, bringing in 46% of the segmented revenue.
The domestic IT services segment [VND8,157bn (+13.9% YoY)/VND460bn (+21.1% YoY)] experienced a recovery in revenue and EBT thanks to boosting cloud computing and Artificial Intelligence solutions for domestic enterprises and digital transformation services in the governmental sector.
The telecom services segment [VND16,906bn (+11.3% YoY)/VND3,420bn (+18.1% YoY)] heightened profitability thanks to better cost control and an increase in ARPU (details were not disclosed), despite stable top line growth. As one of FPT’s fast-growing arms, the education segment delivered revenue growth of 14.3% YoY, slower than the previous years’ due to lower enrolment.
A rebound in profit from affiliates (by 9-fold YoY to VND393bn, primarily fueled by FRT’s recovery) contributed to the overall EBT. Meanwhile, financial profit dropped by 81% YoY owing to lower interest income and dividends.
Outlook: For 2025, we project net revenue and EBT for FPT in 2024 at VND74,800bn (+19% YoY) and VND13,245bn (+19.6% YoY), primarily underpinned by growth momentum in the global IT services segment and steady contribution of the telecom services segment. Furthermore, AI factories will have their first contribution this year with expected revenue of USD40m. Our target price for FPT by YE2025 is VND145,700/share, equivalent to a total return of 4%.
