$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD): Positioned for Growth Amidst Positive Market Trends

Recent developments in fiscal policy, including a 13% salary increase for civil servants and the launch of a third EPF account, are set to enhance consumer confidence and spending power. These changes are expected to drive growth across various sectors, with Focus Point, a leading optical retail chain in Malaysia, particularly well-positioned to benefit.

In the first quarter of FY2024 (ending March 31), Focus Point reported revenue of RM68.3 million, a 14% year-on-year increase, though it saw a 7% decline quarter-on-quarter. The core net profit was RM7.4 million, up 24% year-on-year but down 29% quarter-on-quarter. Additionally, Focus Point declared an increased interim dividend of 1.75 sen per share, up from 1.50 sen per share in the same period last year.

Key Growth Drivers for $FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD):

Tourism Rebound: As the tourism sector recovers, Focus Point is benefiting from increased tourist footfall at its outlets in popular locations, boosting eyewear sales.

Retail Network Expansion: Focus Point is expanding its retail presence, particularly in rural areas. The opening of new stores and the growth of its Sight Savers franchise program are allowing the company to reach a broader customer base.

Corporate Client Acquisition: The company has successfully attracted new corporate clients, providing a steady revenue stream and reinforcing its position in the B2B sector.

To date, Focus Point has opened four Sight Savers stores, with plans to launch six more by the end of the year, strengthening its market leadership. The company's strategy of building partnerships with corporate clients is also showing results, with significant contributions from these key accounts.

The fourth quarter is historically the company’s peak season, with core net profits in previous fourth quarters contributing significantly to full-year profits. As of May 29, 2024, market expectations indicate a 13.4% growth in revenue and a 20.3% increase in core net profit for FY2024.

Conclusion:

The combination of government-induced fiscal stimuli and Focus Point's strategic initiatives in store expansion, corporate client acquisition, and capitalizing on the tourism rebound position the company for sustained growth. Despite seasonal fluctuations, the company is expected to maintain its strong growth momentum, making it an attractive prospect for investors in the retail and service sectors.