FPT - Maintains high growth
FPT is trading at a trailing P/ E of 12.5x. We believe this is a low valuation considering the ability to maintain a CAGR of approximately 20% over the next five years. The main growth driver will come from software outsourcing. The contribution from the education sector will also drive earnings.
FPT's profit growth always fluctuated widely due to the impact of the Retail & Trading and Information Systems segments. The company has recently divested from Retail & Trading, while the proportion of Information System has become insignificant. Therefore, with the increase in the contribution from Software outsourcing and Education, we believe that the growth quality of FPT in general will be more sustainable.
On the other hand, foreign room has always been a factor hindering the stock price. FPT could possibly be included in the VN-Diamond Index or the future approval of “non-voting depository receipt” (NVDR) can solve this issue. We maintain our BUY recommendation for FPT, with a target price of VND 68,000 per share over the next 12 months, equivalent to a forward P/E of 13x.
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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