VDSC: FPT's compound profit after tax growth can reach 23% between 2023 and 2026.

DNHN - VDSC projects that FPT's profit after tax CAGR (compound annual growth rate) between 2023 and 2026 will reach 23%.

FPT Corporation (Code: FPT) has just released its impressive business results for the first eight months of the year. During the same period, revenue reached 32,827 billion VND and pretax profit reached 5,902 billion VND, an increase of 21% and 19%, respectively. Net profit reached VND 4,086 billion, an increase of 20%.

In August, FPT reported revenue of 4,398 billion VND and a net profit of 590 billion VND.

FPT has set a total revenue goal of 52,289 billion VND and a pre-tax profit goal of 9,055 billion VND for this year. After eight months, the company has achieved 63% of its revenue goal and 65% of its profit goal.

The technology segment, which includes domestic and international IT services, recorded revenue of 19,442 billion VND and a pre-tax profit of 2,740 billion VND, both of which increased by 24% compared to the previous period. Technology continues to account for 59% of total revenue and 46% of the group's profit before taxes.

Foreign IT service revenue reached approximately VND 15,292 billion, a 30% increase over the same period, with the Japanese market (up 41%) and APAC region (up 37%) contributing significantly. Driven by the need to invest in IT and digital transformation, the Japanese market's revenue increased by 55%, resulting in a strong growth rate.

The volume of new orders on international markets increased by 26% to reach 19,102 billion Vietnamese Dong.

Regarding domestic IT services, revenue reached 4,150 billion VND, an increase of 6% compared to the previous period. To maintain growth, FPT intends to strengthen cooperation with the government, ministries, and foreign businesses.

The telecommunications division of FPT recorded an 8% increase in revenue to 10,337 billion VND and a 6% increase in pre-tax profit to 2,050 billion VND. The education segment also achieved impressive results, with revenue of 3,047 billion VND and a pre-tax profit of 1,113 billion VND, increases of 63% and 37%, respectively, over the same period.

FPT has high hopes for the export of software, particularly in the second half of 2023. According to the most recent report by Rong Viet Securities (VDSC), this segment will continue to be the primary growth driver for FPT. Despite challenges on the international market for information technology (IT) services, the Japanese market continues to expand rapidly.

VDSC forecasts that the software export segment will experience revenue and profit growth of 24% and 22%, respectively, in the second half of the year compared to the same period last year.

Regarding the domestic IT market, FPT can achieve a 17% growth rate over the same period last year, particularly if the banking and finance industry recovers and the Government sector accelerates its digital transformation.

In the telecommunications sector, services such as PayTV and enterprise telecommunications continued to grow with an increased rate of 15% and 20% respectively over the same period in revenue. As a result of market saturation, broadband services grew slowly by 6%.

VDSC predicts that FPT's profit after tax CAGR (compound annual growth rate) between 2023 and 2026 will reach 23%, thanks to the competitive advantage of low costs and the expansion of the digital transformation and software export sectors.

P.V (t/h)