FRT - Not yet attractive after a deep fall
Weak 4Q 2018 and 1Q 2019 business results reflect the less positive outlook for the ICT market. Special installment programs, accessory sales and collaboration with Nguyen Kim and Fado have not shown promising results yet or are still in the testing phase.
We adjusted the forecasted P/E of FPT Shop from 12x to 8x. Meanwhile, Long Chau pharmacity is a long-term story. Although we appreciate FRT’s approach, it remains challenging to expand the chain rapidly given fierce competition. We estimate Long Chau's value at around VND 5,000 / share (down from VND 8,500 per share in the previous report). Rising costs associated with the expansion, result in a net loss for this business. Long Chau is estimated to reach break-even by 2020.
Our target price for FRT is 50,000 VND / share. We have a NEUTRAL recommendation on the stock.
FPT Digital Retail Joint Stock Company is a Vietnam-based company engaged in the retail distribution of Information Technology (IT) and mobile products. The Company is an operator of two retail chains, including FPT Shop and F.Studio By FPT. It has 500 retail stores in 63 provinces across Vietnam. FPT Shop offers mobile handsets and other personal electronic products, such as tablets, laptops and computer accessories, among others. F.Studio By FPT is an authorized reseller store of Apple Inc. which distributes products under the trademark of Apple. The Company also offers pre-sales and post-sales customer services and a provision of telecom service agents. Its headquarter is based in Ho Chi Minh.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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