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FPT Update – OUTPERFORM
20/03/2025 - 10:17:47 SAFPT CORPORATION (FPT VN)
The stock price fell by 18% YTD and 10% in the last one month, breaking its 6-month low. We believe this correction might stem from 1) profit-taking pressure as the stock skyrocketed by 85% in 2024 and 2) a sentimental effect given the recent downtrend in the global tech stocks, following sharp rallies, which may reckon revaluation of expectations on the AI business, especially when low-cost models like DeepSeek was introduced, as one of reasons. Also, foreign capital outflow may contribute to the stock correction, since foreigners net sold FPT with about VND6,000bn of YTD. Meanwhile, we have yet found momentous changes in terms of fundamentals in FPT.
We maintain our projections with net revenue at VND74,800bn (+19% YoY) and EBT at VND13,245bn (+19.6% YoY) for FPT in 2025, primarily underpinned by growth momentum in the global IT services segment and steady contribution of the telecom services segment. Global IT services remain the most auspicious segment with a 26.6% YoY revenue growth rate in 2025. Japan and APAC could still outstand with expected revenue growth of 30% YoY, bolstered by robust IT spending, especially for digital transformation and AI. For the US market, FPT expects a resumption in this market with expected growth of 20% YoY, based on expectations that Trump’s policies may favor businesses in the US and positive signs in signed revenue in 4Q2024. AI factories will have their first contribution this year with expected revenue of USD40m. We maintain our SOTP-derived target price for FPT by YE2025 at VND145,700/share, equivalent to a total return of 18.5% from the current market price. For more details, please see our latest report here. Rating OUTPERFORM.
