FPT Update – BUY

The company announced stronger 2Q results driven by the core global IT service segment. The highlight is robust expansion in signed revenue, attributed to longer-term contracts signed. We maintain our EBT projection at VND11,787bn (+16.6% YoY). However, given lower peer PERs and higher cost of equity, we revised down our target price to VND100,000/share by YE2026, 17% lower than the prior update. Rating BUY.

Net revenue and EBT growth heightened to 16.4% YoY and 20% YoY in 2Q2026 (1Q2026: 8.7% YoY and 16.2% YoY) on a like-for-like basis (LFL), bringing 1H results to VND26,269bn and VND5,714bn, respectively, in line with our expectations.

Growth came as a result of better performance in global IT services, complemented by domestic IT services and a continued robust momentum in affiliates (e.g. FRT). The global IT service segment rose by 16.3% YoY in net revenue and 19.3% YoY in EBT in 2Q fueled by the recognition of backlog secured in late 2025 and some recovery in its major markets. Domestic IT services leapt on improvements in the public sector, enterprises and initial modest profits from AI factories, especially the cluster in Vietnam, with a utilization rate of 90%.  

Signed revenue is a highlight for jumping by 46% in 2Q and 32% YoY to VND26,338bn in 1H2026, explained by winning longer-term contracts (2-3 years) in its major markets (if excluding these contracts, signed revenue increased by approx.20% YoY in 1H). Growth primarily derived from Japan, Europe and some rebound in the US. Healthy backlog growth should support the global IT service segment in subsequent quarters; nonetheless, revenue recognition is expected to occur progressively because of longer duration of the contracts.

We maintain our EBT projection at VND11,787bn (+16.6% YoY). For a longer outlook, the driving forces may remain the global IT services, with supports from its major markets and the company’s strategy to shift to higher positions in the value chain, such as playing the role of main contractor, partnering with big tech giants to provide AI transformation services.  Although the high-growth base of 20%+ YoY p.a like previous periods has not been expected to return in 1-2 coming years, we expect the company may still generate a decent EBT upturn of 14-17% YoY p.a.