We attended FRT’s AGM on April 14. Our key takeaways are as follows. 

FY2023 guidance: Management targets total revenue of VND34tn (USD1.4bn; +13% YoY) and PBT of VND240bn (USD10mn; -51% YoY) — equivalent to 93% and 62% of our respective forecasts. ICT chain FPT Shop’s sales are targeted at VND20tn (USD851mn; -3% YoY) and pharmacy chain Long Chau’s (LC) sales are targeted at VND14tn (USD596mn; +46% YoY) — equivalent to 94% and 91% of our respective forecasts. Additionally, FRT aims to open 400 new LC stores to bring the chain’s total store count to 1,400 by YE2023 and suspend FPT Shop’s store expansion in 2023. 

Preliminary Q1 2023 results: Total sales growth was flat YoY. FPT Shop’s sales declined 20% YoY, which was partly cushioned by new sales contributions from 110 new stores opened in Q2-Q4 2022. LC’s sales increased more than 50% YoY, which was mainly driven by (1) its rapid store expansion and (2) average monthly sales/store of VND1.1bn, per our estimates. We see potential downside risk to our forecasts for FRT, pending a more extensive review. In addition, management denies the possibility of a consolidated net loss in Q1 2023. 

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