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FPT - Steady Core Operations but Underestimated Financials

We remain optimistic on the stable growth achieved by FPT’s two core businesses, Technology and Telecom. The large cash flow from the divestments have make ways for aggressive capex to develop its telecom service quality and to improve its software engineering capacity. We maintain our optimistic view on FPT’s outsourcing business growth thanks to the abundant new jobs from Japan and other Asia Pacific markets. We also expect that its telecom’s profitability will  rise in the long-term owing to the government’s supportive policy and infrastructure improvements.

We evaluate FPT price at VND 50,900/share and anticipate a cash dividend of VND2,000 per share in the following 12 months, which results in a 26% total return from the closing price on July 31^st, 2018 and we recommend to BUY the stock. Our new target price is similar to that in the previous report, but the recommendation has changed because the stock price has reached an attractive level.