Company Quarterly Earnings Update – FPT VN – 2021

Summary of the 2021 results of FPT Corporation (FPT VN)

2021 Results: Highlights

  • FPT’s net revenue increased by 19.5% y/y to reach VND35,657bn, with all segments experiencing a double-digit growth rate. Of which, the two largest revenue contributors continued to be the Global IT (40.8%) and Telecom services (33.9%), growing by 21.2% y/y and 11.2% y/y respectively. Domestic IT jumped 31.8% thanks to strong demand from digital transformation (DX) from local enterprises and the government. Education has grown strongly by 42.9% y/y due to significant increases in enrollment in the IT sector.
  • Net profit: Gross margin dropped slightly to 38.2% (vs 38.9% of 2020) due to the higher proportion of the domestic IT segment with the lowest gross margin. The significant growth in associate profits was mainly due to a booming stock market and robust healthcare demand during the pandemic, resulting in net profit growing 22.6% to reach 433bn, with a margin of 12.2% (+30bps y/y).

Outlook 2021-2022

  • For 2022: net revenue is projected to reach VND41,889bn (+17.5% y/y), with a net profit of VND5,329bn (+22.9% y/y). The key drivers are (1) a 2% y/y net profit growth for the global IT segment, (2) a 16.6% y/y increase in domestic IT net profit, mainly coming from a significant growth in DX demand from both enterprises and the government, and (3) an improved profit margin thanks to economies of scale in both global and domestic markets, as well as a greater contribution of Made-by-FPT products and the education sector which have better profitability.
  • For 2023: net revenue is expected to reach VND47,294bn, up 12.9% y/y from a high base in 2022, driven by (1) double-digit growth rate from global IT, domestic IT, and the education sectors, (2) single-digit organic growth from broadband services due to high competition with Viettel and VNPT in both subscriber expansion and average revenue per user. With a higher IT salary base for expansion in global markets like South America and India, gross margins will decline slightly from 39.9% to 39.5%. All in all, net profit is predicted to grow by 11.2% y/y, reaching VND5,926bn.

Company ratings and target prices are accessible for clients only.

If you are interested in getting full access to our paid Primary Research Materials feel free to get in touch with us at your convenience.

Our team is actively covering 50 companies in the listed Vietnamese equity space for our clients.


Featured image credit: FPT