Result Update Report: FPT - Sustaining Healthy Growth

“Q1-2022 results are generally in line with our expectations and confirm our positive view on FPT earnings prospects as long-term drivers remain intact. The company’s IT services segment will continue to benefit from the systematic trend of digital adoption, both globally and domestically, in the long-term, spearheading the Group’s earnings outlook with a high projected PBT’s 3Y CAGR of 26% over 2022F-25F. Over the same period, growing subscription of Pay TV and ramped up DC’s capacity, amid steady growth of fixed broadband subscribers, will drive telecom segment’s projected PBT’s 3Y CAGR to 15%. The strong expansion for K-12 education and elevated earnings in key associates, namely FRT and Synnex FPT, will be supportive for the education, and investments segment’s earnings. Projected 3Y CAGR of EPS for 2022F-25F of 21% makes the 2022F/23F PER of 14.7x/11.9x attractive. Besides, FPT’s high weight in the VFMVN DIAMOND ETF (15.9% as of May 31, 2022) is a short-term catalyst for the stock amid strong net inflow in the ETF recently. We raise the TP to VND 133,200 (implying 2022F/23F forward P/E of 20.1x/16.3x), reiterating our ACCUMULATE recommendation”