FPT released preliminary H1 2022 results with revenue of VND19.8tn (USD862mn; +22% YoY) and NPAT-MI of VND2.5tn (USD108mn; +31% YoY). These results fulfilled 45% and 37% of our respective forecasts and broadly tracked in line with our expectation of strong earnings growth for FPT that is backed by its core businesses: IT Services, Telecom Services and Education. Overall, we see no material risk to our current forecast, pending a fuller review.

Software Outsourcing (SO): Revenue +29% YoY, PBT +28% YoY. SO’s PBT margin expanded by 10 bps YoY to 15.8% in H1 2022, which was mainly due to the contribution of digital transformation (DX) services. In H1 2022, DX revenue jumped 65% YoY and contributed 40% to SO revenue, per our estimate, as it increased along with the annual budgets of Vietnamese provinces & municipalities for DX over the next five years. Meanwhile, new offshore SO contract value surged 40% YoY in H1 2022 to VND11.7tn (USD508mn) — down from 57% YoY in Q1 2022 — which could stem from slower revenue growth from the US market of 48% YoY compared with 61% YoY in Q1 2022.