FPT - Strong earnings growth maintained, consistent with our projection - Earnings Flash

* FPT released its 9M 2023 results, reporting revenue of VND37.9tn (USD1.6bn; +22% YoY) and NPAT-MI of VND4.7tn (USD201.9mn; +20% YoY). These figures represent 73% and 76% of our respective full-year forecasts which align with our expectation of FPT’s strong earnings growth in 2023. Consequently, we see no material risk to our forecast, pending a more comprehensive review.

* Global IT Services: Revenue +31% YoY & PBT +30% YoY. Digital transformation (DX) revenue maintained its strong momentum of +46% YoY (accounting for 44% of total global IT revenue). In 9M 2023, Japan and APAC continued to be the key revenue growth drivers, advancing 44% YoY and 38% YoY, respectively. According to FPT, the firm has been experiencing an increase in spending from manufacturing companies in the Japanese market. This is a positive indication of future growth. Revenue growth in the Japanese and APAC markets has offset the continuous slowdown occurring in the US (+14% YoY in 9M 2023 vs +42% YoY in 9M 2022) and EU (+19% YoY in 9M 2023 vs +23% YoY in 9M 2022). Additionally, the new global IT contract value increased 23% YoY in 9M 2023 to VND20.7tn (USD881mn) driven by large deal growth, demonstrating solid pipelines for FPT.

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