Focus Point Holdings Berhad

TA SECURITIES TOP PICKS 2025

Shifting Into High Gear.

This year has laid a strong foundation for economic recovery, setting the stage for continued growth in 2025,
which should positively impact the equity market. Key factors underpinning a positive outlook for equities include: 1) A stronger domestic economy and improving fundamentals, supported by a resilient global economy, 2) Increased foreign and domestic investments, 3) Structural reforms backed by a strong government, boosting the country’s finances and investor confidence, 4) Continuous growth in corporate earnings, supporting expansion in valuation multiples, and 5) A net inflow of foreign funds. However, we anticipate several downside risks that could undermine investor confidence next year: 1) Geopolitical tensions, 2) Trade wars, and 3) Deflationary pressures in China. There could be some volatility in the local equity
market during the early periods of Donald Trump’s second presidency, but in our view, Malaysia has its own merits in remaining resilient and eventually emerging stronger. Our 2025 FBMKLCI target is 1,845, based on a CY26 PER of 15.5x, still undemanding compared to its 5-year (2020-2024) average of 17.0x.

Maintaining our cautiously optimistic outlook on local equities and anticipating a potential 15.5% upside for the FBMKLCI, we recommend the following key investment themes for 2025:
1) Growth Stocks (BNASTRA & PGF): Focus on agile small cap players poised to seize opportunities and deliver strong earnings growth.
2) Disruptive Technologies and Digital Economy (INARI. TM & YTLPOWR): Significant investments in the E&E sector, data centres, and related infrastructure will drive this theme.
3) Domestic Spending and Resilient Economy (AEON,FFB, FOCUSP, GAMUDA, SUNCON, MAHSING, IOIPG, SIMEPROP, CIMB, MAYBANK & PBBANK): Benefiting from a strong labour market, higher disposable income, improving tourism and related industries, robust investments, greater capital market activities and the largestever allocation under Budget 2025.
4) Energy Transition (SAMAIDEN & TENAGA): Aligning with sustainable development goals.
5) Stronger Ringgit (ASTRO & LHI): Favouring companies with high domestic business and import content.

$IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD)
$POLY / 8117 (POLY GLASS FIBRE (M) BERHAD)
$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by RHB

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by TA

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by RHB

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by HLIB

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by PBIV

KUALA LUMPUR: Focus Point Holdings Bhd is expected to record compound annual growth rate (CAGR) of 16 per cent in its earnings for financial year 2023 (FY23) until FY26.

© New Straits Times Press (M) Bhd

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by RHB

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by Mercury Securities

TA INVEST TOP PICKS Q4 2024...

Investment Strategy – Buy on Weakness. Savings from government subsidy rationalisation, multi-billion public spending on infrastructures, foreign direct investments and domestic direct investments in renewable energy and growth sectors identified under the long-term plans are catalysts for domestic sectors. Thus, our top picks are closely associated with the Banking, Construction, Consumer, Healthcare, Power, Property and Telco sectors. The strong growth in the E&E exports driven by the “China Plus One” strategy and demand for advanced technologies, electric vehicles, data centres, etc., are expected to sustain interest in the Technology sector while benefitting Power and Telco players as well.

$YTLPOWR / 6742 (YTL POWER INTERNATIONAL BHD) $IOIPG / 5249 (IOI PROPERTIES GROUP BERHAD) $POLY / 8117 (POLY GLASS FIBRE (M) BERHAD) $FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD) $SIMEPROP / 5288 (SIME DARBY PROPERTY BERHAD)

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by PublicInvest

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by RHB
Buy – TP RM 1.20

"Expect a Record Year In FY24; BUY”

• Maintain BUY and MYR1.20 TP, 50% upside with 5% yield. We remain positive on Focus Point’s prospects following its post-results briefing last Friday. We anticipate FY24 earnings to reach a new high with stronger seasonal factors in 2H, driven by strong brand equity in the optical segment and a sustained turnaround in the F&B business. Its current market valuation of 8.7x FY25F P/E is undemanding, considering the company’s experienced management team, solid earnings delivery, and attractive high ROEs

Analyst:
Tai Yu Jie
tai.yu.jie@rhbgroup.com
Soong Wei Siang
soong.wei.siang@rhbgroup.com

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)

Focus Point has just released their2QFY24 results on Thursday, 22 August 2024! Have a look at their summary🤗

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by TA
Buy - TP RM1.11

"A Solid 2Q24"

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

Analyst:
Tan Kong Jin
kjtan@ta.com.my

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by RHB
Buy - TP RM1.20

"Gaining Momentum; Keep BUY"

Keep BUY, new MYR1.20 TP from MYR1.12, 51% upside with 5% FY24F yield. Focus Point’s 1H24 results are in line, driven by robust growth in the optical segment and promising progress in the F&B unit. We expect the group to continue delivering a robust performance amidst soft consumer sentiment, supported by its solid fundamentals, thereby outperforming most of its retail peers. Its current valuation remains compelling, given its sustainable earnings growth and solid execution by management.

Analysts:
Tai Yu Jie
tai.yu.jie@rhbgroup.com
Soong Wei Siang
soong.wei.siang@rhbgroup.com

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by HLIB
Buy - TP RM1.14

"Double digit growth"

FocusP’s chalked in core PAT of RM8.4m (+13% QoQ; +16% YoY) which brought 1H24 sum to RM15.9m (+19% YoY). This is broadly in line with our/consensus estimates at 42%/44% respectively, as we expect a stronger 2H24. Overall, both optical and F&B segments performed well this quarter registering double digit sales growth YTD. We gather that the group opened three new optical outlets in 2Q24 and targets to open five more by end of FY24. On F&B, we applaud the turnaround registered this quarter and opine the positive momentum will continue. Sales for its main corporate client has been robust with increase in monthly revenue contribution coupled with uptick in number of SKUs. Maintain BUY unchanged TP of RM1.14 pegged to 14x PE on FY25 EPS.

Analyst:
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

$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.

Continuing the list here (part 4):

$LEESK / 8079 (LEE SWEE KIAT GROUP BERHAD) (MC: RM141.0Mil)– Dividend Policy of at least 30% of PAT
$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD) (MC: RM360.4Mil) – Dividend Policy of at least 30% of PAT
$TAMBUN / 5191 (TAMBUN INDAH LAND BERHAD) (MC: RM474.5Mil)- Dividend policy of 40% ~ 60% of PAT
$ELKDESA / 5228 (ELK-DESA RESOURCES BERHAD) (MC: RM554.9Mil) - Dividend policy of 60% of PAT
$HUPSENG / 5024 (HUP SENG INDUSTRIES BERHAD) (MC: RM840mil) - Dividend payout of at least 60% of PAT


MC: Approximate Market Cap

**Note: the dividend payout is subjected to cash flow, valuation gain/loss of properties, etc. (for details please read their respective annual reports)

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by TA
Buy – TP RM1.11

“Growth Intact"

Key takeaways from our recent meeting with Focus Point’s management are: i) corporate sales to drive the optical segment, ii) improving F&B prospects and iii) expansion plans on track. We maintain our Buy recommendation with an unchanged TP of RM1.11 based on PE multiple of 14.0x CY25 EPS.

Analyst:
Tan Kong Jin
kjtan@ta.com.my

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD) - Owner of Focus Point, Whoosh eyewear, Anggun optometris, Excelview Laser Eye Centre, Komugi bakery and HAP&PI frozen yogurt.

The Group has experienced tremendous growth in terms of revenue and profitability over the past 5 years. Despite the rapid expansion, balance sheet remains healthy with low borrowings. Dividends were distributed to shareholders year on year.

However, in the recent 2 years, topline growth has slowed. Net margin is also declining from the 2022 peak. Further monitoring on these indicators required.

Further to note that PNB, its 2nd largest shareholder has been selling off >19m shares since end-May 24. That's roughly 30% of their current shareholdings (62m shares) in FOCUSP.

Not the best time to initiate position yet.

CONSUMER
$AEON / 6599 (AEON CO. (M) BHD) $FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD) $QL / 7084 (QL RESOURCES BERHAD)
Research by HLIB
Overweight

“Government booster to support consumption”

All in all, we turn more positive on consumer sector on the back of (i) possible margin expansion from moderation in raw material prices; (ii) consumption boosters with the EPF Account 3 and civil servants pay hike; (iii) encouraging macro environment with stable employment levels and uptick in retail spending. With this, we upgrade our sector call from Neutral to OVERWEIGHT. Our top picks are Aeon (BUY, TP RM1.82), FocusP (BUY, TP RM1.14), and QL Resources (BUY, TP RM8.18) given their attractive valuations with earnings backed by their expansion plans and brand equities.

Analyst(s):
Syifaa’ Mahsuri Ismail
syifaa@hlib.hongleong.com.my

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

$FOCUSP / 0157 (FOCUS POINT HOLDINGS BERHAD)
Research by RHB
Buy – TP RM1.12

“On Track For Sustained Growth; BUY"

Keep BUY and MYR1.12 TP, 39% upside and 5% yield. After meeting up with Focus Point’s management, we remain upbeat about the company’s outlook. The robust topline growth in 1Q24 (+15.4% YoY) is expected to sustain into 2Q24F, thanks to its effective marketing strategy and rising myopic population. The current valuation appears compelling, given FOCUSP’s ability to drive industry-leading growth underpinned by its market leadership and strong brand equity in the optical business.

Analysts:
Tai Yu Jie
tai.yu.jie@rhbgroup.com
Soong Wei Siang
soong.wei.siang@rhbgroup.com

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - PERBADANAN NASIONAL BERHAD