Long Châu pharmacy chain continues to spearhead growth

 BUSINESS UPDATES

For Q1 2025, FRT reported consolidated revenue growth of 29% YoY, reaching VND 11,670 billion. Profit before tax surged to VND 273 billion (+206% YoY). Long Châu expanded its pharmacy network by 79 stores, while FPT Shop reduced its footprint by 6 stores.

On April 25, 2025, Long Châu Investment finalized a transaction with Malaysia-based Creador Fund, establishing Creador as a minority shareholder. Under the plan, Creador will invest in Long Châu in two phases over one year, targeting a 13% stake at a valuation of USD 1.5 billion.

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We anticipate challenges for ICT electronics retail in 2025, leading to a slight projected decline in FPT Shop’s revenue this year.

The pharmacy segment, however, will remain FRT’s primary growth driver in the coming period, with an average of 300 new Long Châu stores expected annually over the next three years (while FPT Shop scales back). Momentum from online sales via the website and VNeID app, combined with revenue from vaccine services, will sustain Long Châu’s robust growth trajectory.

We forecast FRT’s 2025 revenue and profit before tax at VND 43,410 billion and VND 1,102 billion, respectively, reflecting YoY increases of 7.8% and 101%.

Recommendation: ACCUMULATE FRT stock with a target price of VND 191,000 per share, implying a 13.8% upside from the closing price on April 29, 2025.