COMPANY ANALYSIS REPORT
FPT Corporation is one of the largest information technology service companies in Vietnam, with its core business focusing on providing telecommunications technology products and services, software, and consulting solutions for technology and telecommunications both domestically and internationally. In addition to the technology sector, FPT continues to expand its presence in education and investment.
INVESTMENT THESIS
- Strong growth in the technology segment driven by international markets: The technology segment continues to experience strong growth, primarily fueled by contributions from international markets. We expect technology segment growth to reach 27% in 2025 and an average of 25% during 2026-2029, supported by the global increase in technology spending and FPT’s aggressive market expansion through M&A activities and partnerships in Japan, the U.S., and Taiwan. The value of newly signed IT service contracts with international clients in 2025 is projected to exceed USD 1.3 billion. Additionally, FPT's collaboration with NVIDIA in semiconductor chip production and AI services, facilitated by two AI factories in Japan and Vietnam, further expands growth opportunities for the company.
- Stable growth in Telecommunications and Education segments: The development of data centers will be a key growth driver for the telecommunications segment in the coming years. In 2025, FPT plans to complete and launch its fourth data center in Ho Chi Minh City. We project that the telecommunications segment will achieve 12% revenue growth this year. Meanwhile, the education segment is expected to maintain a 9% growth rate, driven by the expansion of K-12 schools and universities across various provinces and cities, as well as collaborations with foreign universities to broaden technology-related academic programs.
- Expanding customer base and revenue through government digital transformation initiatives: FPT plays a key role as the general contractor for government projects, supporting ministries, agencies, and local governments. The company has successfully implemented over 200 projects across more than 20 provinces and cities and is expected to continue collaborating with the government on digital transformation initiatives. Additionally, FPT aims to increase its enterprise customer base in digital transformation, particularly in AI and cloud computing, through its "Made by FPT" ecosystem.
- 2025 Business Outlook: For 2025, we forecast total revenue to reach VND 76,100 billion (+21.2% YoY) and pre-tax profit to reach VND 13,364 billion (+17.5% YoY).
2024 BUSINESS UPDATE AND FORECAST
2024 business updated, FPT recorded net revenue of VND 17,607 billion (+19.8% YoY) and net profit after tax (NPAT) of VND 2,493 billion (+20.75% YoY). For the full year 2024, net revenue and NPAT reached VND 62,848 billion (+19.4% YoY) and VND 9,420 billion (+24.4% YoY), exceeding the business plan target by 2%.
- The technology segment recorded an annual revenue of VND 39,110 billion (+24.3% YoY) and a pre-tax profit of VND 5,229 billion (+25.7% YoY). This growth was primarily driven by revenue from IT products and services in international markets, particularly the United States, Japan, and the Asia-Pacific region.
- The Telecommunications and Education: The Telecommunications segment recorded revenue of VND 17,610 billion, reflecting an 11.3% year-on-year (YoY) growth. Meanwhile, the Education segment achieved VND 7,444 billion in revenue, marking a 13% YoY increase. This growth was primarily driven by the expansion of facilities and the introduction of new academic programs.
RECOMMENDATION
OUTPERFORM recommendation with a 1-year target price of VND 171,200/share and an upside potential of 20,9%.
VALUATION
- Using the Free Cash Flow to Firm (FCFF) discounted cash flow valuation method, we set a one-year target price of VND 171,200.
- Risks: (1) Slower-than-expected progress in the deployment of the AI Factory project, (2) Higher-than-expected IT engineer salaries, reducing competitive advantage compared to lower-cost AI models, (3) Lower-than-expected revenue from software and IT services in international markets, (4) Increased competition from public universities.
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