Review

• Focus Point Holdings Berhad’s (FOCUSP) 1HFY23 net profit of RM13.3mn came in at 40.5/37.4% of our and consensus’ full-year estimates. We consider the results to be within expectations as 4Q tends to be the strongest quarter.

• QoQ, revenue and PBT grew 5.6% and 19.1% to RM63.0mn and RM9.8mn respectively. The better results were driven by lower losses from the food and beverage segment and a higher contribution from the optical segment.

• YoY, net profit decreased by 18.6% to RM13.3mn despite higher revenue of 2.7% to RM122.7mn. The optical segment PBT dropped to RM17.6mn from RM19.3mn in 1H22 due to the higher operating costs and rental from the opening of new outlets. Note that last year’s performance was boosted by the EPF special withdrawal scheme of RM10,000 and the reopening of the economy.

• Meanwhile, the food and beverage segment recorded an LBT of RM1.0mn (vs. PBT of RM1.3mn in 1H22) due to the higher staff and operating costs.

Impact

• No change to our earnings estimates.

Outlook

• Moving into 3Q23, we believe that the group growth momentum will continue on the back of better sales from both the optical and food and beverages segments. Management continues to focus on strategic network expansion to drive sales and enhance its overall cost efficiency.

Valuation

• Maintain our Buy recommendation on the stock with an unchanged TP of RM1.11/share based on 15.0x CY24 EPS.

Source: TA Research - 23 Aug 2023