Review

• Focus Point Holdings Berhad’s (FOCUSP) FY23 core net profit of RM31.0mn (-13.7% YoY) came in within our expectations.

• QoQ, 4Q23 PBT rose 38.1% to RM12.7mn, ahead of revenue growth of 14.2% to RM73.7mn. The stronger performance was attributed to the festive period, leading to a sales growth of 17.2% to RM60.7mn for the optical segment. In addition, the food and beverage division turnaround with a PBT of 0.2mn (vs. LBT of RM0.2mn in 3Q23).

• YoY, FY23 revenue increased 4.9% to RM260.9mn but PBT declined by 16.7% to RM39.9mn. The weaker performance was due to: i) losses in the F&B segment, ii) increase in promotional expenses and iii) higher staff costs as well as rental from the opening of new outlets. Note that FY22 performance was boosted by the EPF special withdrawal scheme of RM10,000, along with reopening of the economy.

Impact

• No change our earnings projections.

Outlook

• For 2024, Focus Point targets to open 10-12 optical outlets in strategic locations to drive revenue growth. In addition, the group will enhance its cost management approach to contain the cost pressure. Thus, we are optimistic that the group will sustain its growth trajectory in FY24.

Valuation

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

Source: TA Research - 23 Feb 2024