FRT - NPAT-MI turns positive in Q1 2024; LC’s margins continue improving - Earnings Flash
  • 2024-04-26T00:00:00
  • Company Research
  • Q1 2024: Net sales were VND9.0tn (+17% YoY) and NPAT-MI was VND39bn (USD1.6mn; vs. net loss of USD200,000 in Q1 2023), equivalent to 23% and 79% of our respective full-year forecasts. Q1 NPAT-MI tracked ahead of our 2024F forecast mainly due to (1) a lower-than-expected net financial loss and (2) higher-than-expected NPAT-MI of Long Chau (LC). Based on our estimates, FPT Shop’s net loss of VND51bn (USD2.0mn) was fully offset by LC’s NPAT-MI of VND90bn (USD3.6mn).
  • LC: In Q1 2024, its average monthly sales/store inched up to VND1.2bn (vs. VND1.0-1.1bn in 2023), which coupled with 531 net new stores YoY, drove its sales to increase by 68% YoY. In Q1, LC opened 90 stores, increasing its store count to 1,587 at end-Q1 2024. It also opened 41 new vaccination centers in the quarter.
  • FPT Shop: In Q1 2024, FPT Shop’s sales dropped 21% YoY, while its GPM increased 3.9 ppts YoY to 13.4%. According to FRT, this was due to FPT Shop adjusting its product mix towards higher-GPM products. Its online sales increased 10% YoY in Q1, which accounted for 43% of FPT Shop's revenue in Q1. Finally, FPT Shop closed 12 stores in Q1, decreasing its store count to 743 at end-Q1 2024.
  • Profitability: LC’s NPM improved 10 bps YoY to 1.6% in Q1 2024. This was mainly due to a 47% YoY drop in net financial loss, which was partly offset by 90-bps-YoY increase in SG&A/sales. As for FPT Shop, its NPM improved 10 bps YoY to -1.4%, albeit with a strong increase in GPM. This was due to its G&A expenses surging 47% YoY. 
  • Our view: As for Q1 2024, FPT Shop’s net loss is in line with our forecast, and we expect this loss will continue reducing towards the year end. On the other hand, LC’s NPAT-MI tracked ahead of our expectation thanks to its (1) lower-than-expected net financial loss and (2) better-than-expected operating margin. We see upside potential to our 2024F NPAT-MI forecast, pending a fuller review.

FRT’s Q1 2024 results

VND bn

Q1 2023

Q1 2024

YoY

2024F

Q1 2024 as % of 2024F

Net revenue

7,753

9,042

17%

38,504

23%

  • FPT Shop

4,513

3,583

-21%

16,746

21%

  • Pharmacy

3,240

5,459

68%

21,758

25%

Online sales 1

1,410

1,555

10%

6,134

25%

 

 

 

 

 

 

Gross profit

1,186

1,807

52%

6,841

26%

  • FPT Shop

427

480

12%

1,832

26%

  • Pharmacy

759

1,327

75%

5,010

26%

 

 

 

 

 

 

SG&A expenses

-1,119

-1,683

50%

-6,362

26%

EBIT

68

124

83%

479

26%

Net financial loss

-70

-35

-49%

-286

12%

  • Financial income

17

25

53%

54

47%

  • Financial expenses

-86

-61

-30%

-340

18%

NPAT-MI

-5

39

N.M.

49

79%

  • FPT Shop

-54

-51

-5%

-167

30%

  • Pharmacy

49

90

84%

216

42%

Gross margin

15.3%

20.0%

 

17.8%

 

  • FPT Shop

9.5%

13.4%

 

10.9%

 

  • Pharmacy

23.4%

24.3%

 

23.0%

 

SG&A/net sales

14.4%

18.6%

 

16.5%

 

EBIT margin

0.9%

1.4%

 

1.2%

 

  • FPT Shop

-0.6%

-1.0%

 

-0.4%

 

  • Pharmacy

3.0%

2.9%

 

2.5%

 

NPAT-MI margin

-0.1%

0.4%

 

0.1%

 

Source: FRT, Vietcap (1 online sales are included in FPT Shop’s sales)

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