Due to weak consumer spending, we believe that the company’s ICT segment will still experience difficulties in the next six months. Meanwhile, we expect that Long Chau can generate profit large enough to offset the loss of ICT segment given (1) there is room to gain market share in Vietnam pharmacy retail, (2) the advantage of scale allows the chain to optimize cost per store and compete with traditional pharmacy stores & other modern retail chains as well. Therefore, we expect FRT to achieve a turnaround in 2024 from its net loss in 2023. Using the sum-of-the-parts method, we revise up the target price of FRT by 73% to VND112,800 per share, mainly due to the revaluation of Long Chau’s intrinsic value. The stock price, however, has recovered quite fast following the better-than-expected performance of Long Chau in 2023. We believe that the rally of the stock has fully reflected the bright outlook of chain in 2024. Therefore, we recommend investors to monitor the stock’s price movement and accumulate on the stock in the deep correction sessions
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