FPT Digital Retail JSC – OUTPERFORM

CorporateFPT Digital Retail JSC
TickerFRT (HOSE)
Valuation date20/12/2018
Holding period1 year
Valuation 93.1
AnalystTony Bui

 

ContentDetail
Basic Information 

-http://finance.vietstock.vn/FRT-fpt-digital-retail-joint-stock-company.htm

 

Industry and Corporate Position-The technology product distribution and retail market’s perspective remain positive. Owning to the population of 90 million have a young population structure and booming the middle-income class.
-FRT was a subsidiary company of FPT Corp until 2017. The core business is the technology products sales, in which the main product is the telephone. Recently FRT has the second largest market share with 19%. (MWG have the largest market share).
– The retail chain of FPT shops (516 stores) sell telephones, laptops, tables, and accessories made by various branches. A highlight chain of whole FPT retail chains is FStudio (12 stores) get the highest distribution standard of Apple Premium Reseller (APR). Due to that FStudio Chain has the authorization to distribute Apple’s official products and receive Apple’s support in branding and insurance.
Business model 

– Business Update 9M/2018

(1) Net Revenue from stores (both FPT shops and FStudio) reached 8,200 billion, increase by 10% compared with the last year, because of 51 new opening stores and the average revenue per a store increases.
(2) The revenue came from F-Friend and Telco installment strategies contributed over 1000 billion VND, equivalently 10% of the total revenue. The revenue came from selling online channel reached about 1700 billion, that increased 18% compared with the last year. Due to FRT satisfied a part of the profit margin rate to boost the installment sale, so the profit margin decreased by 1.2% compared with the previous year.
– FRT is supposed that the company is exercising some first steps for participating in retail pharmacies and starting with the chain of 10 Long Chau pharmacy stores.

 

Perspectives of corporateBasically, FRT’s business depends on technology product distribution and retail. The telephone sale increased 5-6% per year, besides the number of FPT shops grew up 563 stores. However, the gross profit margin took a downside pressure due to the cost of opening stores.
In the long-term, the perspectives of corporate’s growth rate depend on:
(1) In general, the retail telephone market is saturated, (the potential growth is very low) in which MWG dominate the telephone market share approximates 50%. Distributing the official Apple products is a highlight point meanwhile the quantity of the standardized stores with Apple Premium Reseller is very low.
(2) Retail pharmacy market is real potential with the retail sales of 1.6 Billion USD, and Long Chau is a successful chain in HCMC with the average revenue is approximate 3.25 billion/month/store. That is super higher than other chains like An Khang and Phano with 700 Million/month/store.

 

Financial situation– Basically, FRT has a strong financial situation. The debt ratio has reduced gradually for 5 years. Liquidity measurement ratios are stable.
-In 2016 and 2017, cash flow is positive that demonstrate the operating business is running well.
– During 2018-2019, projected Net Income is between 372-452 billion, equivalently with EPS between 5340-6488 VND/share.

 

Disclaimer of Liability
All of information and analysis on this report made by vnstockmarket.net based on information sources that the company provides to us reliable resources, available and legal. we are not guaranteed about the correctness or completeness of this information. Investors who are using this report need to note that all of the comments on this report only the subjective opinions of vnstockmarket.net. The investors have to take their own responsibility for their decision when using this report. Vnstockmarket.net may base on all information in this report or others to make the decision for us, but not have any claim on legal of given information. At making this analysis report time, vnstockmarket.net does not hold FRT stocks and analyst does not hold any FRT stock.
Reference sourcehttp://finance.vietstock.vn
http://frt.vn/
https://www.hsc.com.vn/en

For more information contact Mr. Tony Bui

en English