Company Overview

FPT Corporation, established in 1988, was initially the Food Processing Technology Company. The company later pivoted towards IT as its core business sector and was listed on the Ho Chi Minh City Stock Exchange since 2006. Currently, FPT has charter capital of 14.6 trillion VND and has been a leading technology company in Vietnam.

Financial Performance

FPT has achieved impressive revenue growth, with a CAGR of 13.7% from 2019 to 2023, driven by Technology, Telecommunications, and Education. In the first 9 months of 2024, total revenue reached VND 45,241 billion, up 19.3% YoY, with Technology contributing 61.8%, Telecommunications, led by FPT Telecom and FPT Online, contributed 28.3% while Education and Others accounted for 9.9% of total revenue. Net profit after taxes (NPAT) have witnessed a 5-year CAGR growth from 2019 to 2023 of 14.8%, with net margin for the same period at an average of 14.7%.

Key Investment Rationales

FPT’s outlook for 2024 and the coming years remains positive.

In the short-term, we expect the strong demand for digital transformation, AI, and cloud services will continue to drive FPT's global expansion, especially in markets like the APAC region and Europe. Meanwhile, in Vietnam, the digital economy is expected to grow by 31% annually, reaching USD 57 billion by 2025. The government's push for digital transformation and technology adoption across all industries will be a major tailwind for FPT's domestic business.

In the long term, with the Vietnamese government emphasizing the need to improve technology levels, self-reliance and domestic production of chips, FPT is expected to take the lead in the role of a self-reliant technology center and promote the country's development on its own.

Based on our projections using the weighted average valuation of FCFF, P/E and sum-of-the-parts methods, SBBS recommends BUY for FPT with a target price of 171,000 VND/share, an upside potential of 16.3% compared to 147,000 VND/share as of 09 Dec 2024.