Review

• Focus Point Holdings Berhad’s (FOCUSP) 1Q24 net profit of RM7.4mn came in within expectations – accounting for 21.6/20.9% of our and consensus’s full-year projections.

• 1Q24 PBT grew 22.1% YoY to RM10.0mn on the back of higher sales of 14.5% to RM68.3mn. We attribute the stronger performance to higher sales across all segments. The optical segment revenue and PBT grew by 15.4% and 10.4% to RM56.0mn and RM9.2mn respectively, driven by higher footfalls to shopping malls.

• Meanwhile, the food and beverage division LBT reduced to RM0.4mn from RM0.8mn in 1Q23 due to higher retail and corporate sales. This led to a higher F&B division sales of RM10.1mn (+13.6% YoY).

• QoQ, revenue reduced 7.3% to RM68.3mn while PBT declined by 21.0% to RM10.0mn. The weaker performance was due to: i) losses in the F&B segment and ii) seasonality. Note that 4Q is typically the strongest quarter due to higher corporate sales and year-end festive period.

Impact

• No change to our earnings projections.

Outlook

• We believe that eyewear business will remain resilient amid the prevalence of myopia among Malaysians. The group is optimistic on optical segment prospects, targeting to open 10 new outlets and 10 Sightsavers outlets (vs. net opening of 6 outlets in FY23) in FY24.

Valuation

• Reiterate Buy recommendation on the stock with an unchanged TP of RM1.11/share based on 14.0x CY25 EPS.

Source: TA Research - 24 May 2024