FRT Flash note – NEUTRAL

FPT DIGITAL RETAIL JSC (FRT VN)

The company reported growth of 26.1% YoY in net revenue and 239% YoY in EAT in 1H2025, driven by Long Chau’s strong performance. We project the company’s EAT at VND756bn (+85.1% YoY) in 2025, 8% higher than the prior update, and move target price to 1H2026 at VND161,500/share, equivalent to a 4.9% total return. Rating NEUTRAL. 

FRT announced 2Q2025 net revenue and EAT grew by 23.3% YoY and 225% YoY, respectively. The cumulative growth achieved 26.1% YoY and 239% YoY, to VND23,060bn and VND370bn, respectively, in 1H2025.

Long Chau continued to drive the company’s revenue and earnings upturns. We estimate Long Chau generated 40.3% YoY revenue growth, to VND15,938bn, and 87.6% YoY EAT growth to VND416bn in 1H2025, primarily fueled by robust network expansion – 2,396 stores in operation (+300 pharmacies and vaccination centers YTD, compared to the company’s plan of 430 new stores) at the end of June 2025, a bit higher than our expectation.

The FPT Shop chain continued to perform dully with 2.9% YoY net revenue growth, to VND7,122bn, and made a loss of VND46bn in 1H2025 albeit improving by more than half YoY.  The chain has boosted consumer electronics sales; however, we believe this business takes time to generate meaningful contribution.

Stable gross margin and more efficient operations. Gross margin held steady YoY at 19.9% in 1H2025, with Long Chau’s slight gains offsetting FPTShop’s compression. Enhanced operational efficiency across both brands lowered the SG&A-to-net revenue ratio to 17.5%, from 18.4% in 1H2024.

We project that the company may deliver VND47,110bn (+17.5% YoY) in net revenue and VND756bn (+85.1% YoY) in EAT in 2025, 8% higher than the prior EAT projection. Combining the DCF and EV/Sales methods, our target price for FRT by 1H2026 is VND161,500/share.