Focus Point (FOCUSP MK): Set For a Solid 2Q25; Still BUY
8 August 2025
Consumer Cyclical | Consumer Products
- Keep BUY, with new DCF-derived MYR0.99 TP from MYR1.05, 33% upside and c.6% FY26F yield. We expect Focus Point to deliver solid growth in its upcoming 2Q25 results. We continue to favour the stock for its market leadership position to capitalise on the rising myopic population. Current valuation is undemanding, particularly given its consistent outperformance of the broader retail sector, even amid a challenging operating environment.
- 2Q25 results preview. Focus Point is tentatively scheduled to release its 2Q25 results on 19 Aug. We expect the results to be in line with our and consensus expectations, with 2Q25 net profit estimated at MYR9-10m (+7-19% YoY). This will be supported by strong sales growth in the optical segment, underpinned by effective marketing initiatives. While the F&B segment remains soft, we anticipate a QoQ improvement, driven by better seasonality following the post-Ramadan period.
- Expanding store footprint. Focus Point plans to expand its presence in East Malaysia, tapping into an underserved market with limited competition. It recently launched a new Focus Point concept store (Figures 1 and 2) – a new format (capex: MYR1.3m vs MYR0.8m for a normal store) and larger floor space (1,500 sq ft vs 900 sq ft). Moving forward, the group will continue rolling out effective marketing initiatives, including roadshows and promotional campaigns, to drive both optical retail and corporate sales. Additionally, management revealed that one of its key suppliers (MYR40m in annual purchases) has raised retail prices by 15% on >50% of its products without any increase in cost effective August, which could lead to meaningful GPM expansion for the group.
- Second growth avenue. Management remains prudent in expanding Komugi outlets, given consumer sentiment continues to weigh on overall sales performance. On the corporate front, discussions with several coffee chains are ongoing, although progress has been gradual. That said, easing raw material prices may help cushion margins for the segment.
- Forecast and ratings. While the additional Employees Provident Fund (EPF) contributions for foreign workers are minimal given the group employs c.70 foreign workers, the sales & service tax (SST) expansion is expected to add c.MYR300k in monthly operating costs, according to management. To reflect the higher cost base, we trim our FY25F-27F earnings by 4%, 6%, and 6%, respectively. Accordingly, we revise our DCF-derived TP to MYR0.99 (inclusive of a 2% ESG discount), after rolling forward our DCF base year to FY26F. This implies 11.4x FY26F P/E, or +1SD above its mean – broadly in line with the valuation of other consumer retail names under our coverage.
- Key downside risks: Major delays in expansion plans and a loss of key corporate customers in the F&B segment.
Price Chart: FOCUSP MK (FOCUSP MK)
A chart showing Price Close vs Relative to FBM KLCI (RHS) from Aug-24 to Jul-25 was displayed here.
Source: Bloomberg
Forecasts and Valuation
| Forecasts and Valuation | Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F |
|---|---|---|---|---|---|
| Total turnover (MYRm) | 261 | 293 | 327 | 356 | 384 |
| Recurring net profit (MYRm) | 33 | 33 | 36 | 40 | 44 |
| Recurring net profit growth (%) | (9.2) | 1.5 | 7.9 | 11.5 | 9.4 |
| Recurring P/E (x) | 10.44 | 10.29 | 9.54 | 8.55 | 7.82 |
| P/B (x) | 2.9 | 2.5 | 2.2 | 2.0 | 1.8 |
| P/CF (x) | 5.55 | 5.25 | 3.95 | 3.51 | 2.97 |
| Dividend Yield (%) | 4.1 | 4.7 | 5.2 | 5.8 | 6.4 |
| EV/EBITDA (x) | 3.68 | 3.61 | 3.41 | 2.74 | 2.19 |
| Return on average equity (%) | 27.4 | 26.2 | 24.9 | 24.5 | 23.8 |
| Net debt to equity (%) | net cash | net cash | net cash | net cash | net cash |
Note: Small cap stocks are defined as companies with a market capitalisation of less than USD0.5bn.
Source: Company data, RHB
Emissions And ESG
Emissions (tCO2e)
| Emissions (tCO2e) | Dec-22 | Dec-23 | Dec-24 | Dec-25 |
|---|---|---|---|---|
| Scope 1 | – | 210 | 226 | – |
| Scope 2 | – | 1,697 | 1,853 | – |
| Scope 3 | – | – | 1,174 | – |
| Total emissions | na | 1,907 | 3,253 | na |
Source: Company data, RHB
Latest ESG-Related Developments
By expanding the scope of carbon emissions reporting to include Scope 3 and enhancing data tracking, Focus Point is taking a holistic approach to understanding the environmental impact.
This reflects its ongoing commitment to transparency and its belief that even small, consistent actions whether in reducing energy usage, or refining travel and commuting practices which can lead to meaningful, lasting change.
ESG Unbundled
Overall ESG Score: 2.9 (out of 4)
Last Updated: 23 May 2025
E Score: 2.3 (GOOD)
In response to decarbonisation efforts and a commitment to a net-zero economy, the group has enhanced energy efficiency and reduced its carbon footprint. The group has started disclosing emission data for FY23.
S Score: 4.0 (EXCELLENT)
The group prioritises employee health and safety to minimise work-related accidents. It upholds human rights, supports talent development, and promotes diversity and inclusion. FPHB’s foundation conducts charitable initiatives and provides vision screening and eyewear to students in need.
G Score: 3.0 (GOOD)
FPHB maintains strong corporate governance with policies including equal opportunity, anti-bribery, personal data protection, and a code of conduct. It adheres to the Malaysian Code on Corporate Governance (MCCG), with a Board comprising 50% independent directors and meeting the 30% women directors recommendation.
ESG Rating History
A chart showing the ESG rating history from Aug-23 to Aug-25 was displayed here. The rating progressed from 2.8 to 2.9.
Source: RHB
Financial Exhibits
Key drivers
- Outlet expansion;
- Growing myopic population;
- Turnaround of F&B business.
Key risks
- Major delay in expansion plans;
- Loss of key corporate customers for the F&B business;
- Competition.
Company Profile
Focus Point is a prominent player in both the optical and Food and Beverages industries in the market.
Financial summary (MYR)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring EPS | 0.07 | 0.07 | 0.08 | 0.09 | 0.09 |
| DPS | 0.03 | 0.04 | 0.04 | 0.04 | 0.05 |
| BVPS | 0.26 | 0.29 | 0.33 | 0.37 | 0.42 |
| Return on average equity (%) | 27.4 | 26.2 | 24.9 | 24.5 | 23.8 |
Valuation metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Recurring P/E (x) | 10.44 | 10.29 | 9.54 | 8.55 | 7.82 |
| P/B (x) | 2.9 | 2.5 | 2.2 | 2.0 | 1.8 |
| FCF Yield (%) | 15.7 | 14.9 | 19.5 | 22.6 | 26.3 |
| Dividend Yield (%) | 4.1 | 4.7 | 5.2 | 5.8 | 6.4 |
| EV/EBITDA (x) | 3.68 | 3.61 | 3.41 | 2.74 | 2.19 |
| EV/EBIT (x) | 7.12 | 7.01 | 6.46 | 5.65 | 4.87 |
Income statement (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total turnover | 261 | 293 | 327 | 356 | 384 |
| Gross profit | 169 | 187 | 214 | 232 | 250 |
| EBITDA | 91 | 94 | 98 | 117 | 136 |
| Depreciation and amortisation | (44) | (45) | (46) | (60) | (75) |
| Operating profit | 47 | 48 | 52 | 57 | 61 |
| Net interest | (5) | (5) | (5) | (4) | (3) |
| Pre-tax profit | 40 | 44 | 47 | 53 | 58 |
| Taxation | (10) | (11) | (11) | (13) | (14) |
| Reported net profit | 30 | 33 | 36 | 40 | 44 |
| Recurring net profit | 33 | 33 | 36 | 40 | 44 |
Cash flow (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Change in working capital | (15.7) | (16.8) | (0.2) | (7.4) | (6.9) |
| Cash flow from operations | 61.6 | 65.1 | 86.6 | 97.3 | 115.0 |
| Capex | (7.9) | (14.2) | (20.0) | (20.0) | (25.0) |
| Cash flow from investing activities | 1.1 | (9.1) | (20.0) | (20.0) | (25.0) |
| Dividends paid | (13.9) | (16.2) | (17.9) | (20.0) | (21.9) |
| Cash flow from financing activities | (64.7) | (54.0) | (63.3) | (64.2) | (65.2) |
| Cash at beginning of period | 54.0 | 39.4 | 38.5 | 41.8 | 54.9 |
| Net change in cash | (2.0) | 2.0 | 3.3 | 13.1 | 24.7 |
| Ending balance cash | 51.9 | 41.4 | 41.8 | 54.9 | 79.6 |
Balance sheet (MYRm)
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Total cash and equivalents | 39 | 39 | 42 | 55 | 80 |
| Tangible fixed assets | 137 | 144 | 158 | 157 | 148 |
| Total investments | 3 | 1 | 1 | 1 | 1 |
| Total assets | 283 | 288 | 315 | 338 | 362 |
| Short-term debt | 18 | 18 | 18 | 18 | 18 |
| Total long-term debt | 17 | 17 | 17 | 17 | 17 |
| Total liabilities | 165 | 153 | 162 | 165 | 167 |
| Total equity | 118 | 135 | 153 | 173 | 195 |
| Total liabilities & equity | 283 | 288 | 315 | 338 | 362 |
Key metrics
| Dec-23 | Dec-24 | Dec-25F | Dec-26F | Dec-27F | |
|---|---|---|---|---|---|
| Revenue growth (%) | 4.9 | 12.1 | 11.8 | 8.9 | 7.9 |
| Recurrent EPS growth (%) | (9.2) | 1.5 | 7.9 | 11.5 | 9.4 |
| Gross margin (%) | 64.9 | 63.8 | 65.3 | 65.1 | 65.1 |
| Operating EBITDA margin (%) | 34.8 | 32.0 | 30.0 | 33.0 | 35.4 |
| Net profit margin (%) | 11.6 | 11.3 | 11.0 | 11.2 | 11.4 |
| Dividend payout ratio (%) | 46.0 | 48.7 | 50.0 | 50.0 | 50.0 |
| Capex/sales (%) | 3.0 | 4.9 | 6.1 | 5.6 | 6.5 |
| Interest cover (x) | 7.65 | 7.54 | 8.06 | 8.84 | 9.47 |
Source: Company data, RHB
Valuation and Store Concepts
Figure 1 & 2: Focus Point’s concept store
Images of the new concept store were displayed, showing a modern interior and product displays. Source: Company data, RHB.
Figure 3: DCF valuation
| FYE Dec | FY26F | FY27F | FY28F | FY29F | FY30F | FY31F | FY32F | FY33F | FY34F | FY35F |
|---|---|---|---|---|---|---|---|---|---|---|
| EBIT | 57 | 61 | 65 | 68 | 72 | 75 | 78 | 80 | 82 | 85 |
| EBIT*(1-tax rate) | 44 | 47 | 50 | 52 | 54 | 55 | 56 | 57 | 58 | 58 |
| Add: D&A | 4 | 4 | 5 | 5 | 6 | 6 | 7 | 8 | 9 | 10 |
| Less: WC investments (WC Inv) | -7 | -7 | -7 | -7 | -8 | -8 | -9 | -9 | -10 | -10 |
| Less: Fixed investments (FC Inv) | -20 | -25 | -25 | -30 | -30 | -35 | -35 | -35 | -35 | -35 |
| FCFF | 21 | 19 | 22 | 19 | 21 | 18 | 20 | 21 | 22 | 23 |
| Disc. FCFF | 20 | 17 | 19 | 16 | 16 | 13 | 14 | 14 | 14 | 13 |
| Terminal value at T=10 | 516 |
| PV of terminal value | 304 |
| NPV | 156 |
| Less Debt | 4 |
| Less Minority Interest | 0 |
| Equity Value of Firm | 465 |
| ESG premium/discount | -2% |
| Fair Value per share | 0.99 |
| Implied FY26F P/E | 11.4 |
Source: RHB
Recommendation Chart
A recommendation chart was displayed here, showing the price close, target prices, and buy recommendations from Aug-20 to Feb-25. Source: RHB, Bloomberg
| Date | Recommendation | Target Price | Price |
|---|---|---|---|
| 2025-05-26 | Buy | 1.05 | 0.78 |
| 2025-02-26 | Buy | 1.05 | 0.75 |
| 2025-02-26 | Buy | 1.05 | 0.75 |
| 2024-08-23 | Buy | 1.20 | 0.80 |
| 2024-08-22 | Buy | 1.20 | 0.80 |
| 2024-05-24 | Buy | 1.12 | 0.82 |
| 2024-02-23 | Buy | 1.02 | 0.76 |
| 2024-02-07 | Buy | 1.02 | 0.70 |
| 2021-10-29 | Not Rated | na | 0.55 |
Source: RHB, Bloomberg
RHB Guide to Investment Ratings
Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage
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