FPT_BUY_TP 60,700 VND_Upside 31%_2020 AGM Update_BSC Company Update

Valuation
We continue to recommend BUY for FPT stock with a new target price of VND 60,700/share (down 13.6% compared to the latest target price) based on PE / FCFF method at the proportion of 40%/60% (PE fw = 11) due to (1) lower the 2020 business result due to negative impact of Covid – 19 (2) lower target P/E for FPT stock to 11 from 13.
2020 Business plan
In 2020, FPT plans revenue and PBT are at VND 32,450 billion (+ 17% YoY) and VND 5,510 billion (+ 18% YoY) respectively.
2020 BSC Business forecast
BSC forecasts that FPT's 2020 net revenue and profit PBT will be VND 31,805 billion (+ 14.7% YoY) and VND 5,321 billion (+ 14.1% YoY). EPS FW 2020 is 4,837 VND/share (+14% YoY) (deducted from bonus and welfare fund)
Catalyst                       
•    SCIC divests from FPT 
Company update
On 8/4/2020, BSC participated in online 2020 AGM of FPT. The BOD answered questions related to impact of Covid-19 and Digital Transformation strategy.
(1)    Impact of Covid-19: Outsourcing segment is to grow mildly in Q2.2020 (CAGR in 2015 – 2019 was 21.5%/year). However, with solid financial base and large customers, FPT is strong enough to withstand the difficult time ahead.
(2)    Digital Transformation Strategy of FPT
Moreovers, there are some important informations: (1) ESOP issuance for managers and employees, (2) 2020 dividend policy: 20% cash dividend (10% cash dividend and 15% stock dividend are to implement in June 2020).