FOCUSP: Strong Optical Sales Drive Earnings Beat Amid Cost Efficiencies
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.57 (+14.8%) |
| Last Traded | RM0.495 |
| Recommendation | Outperform |
Focus Point Holdings Berhad reported a significant increase in its fourth-quarter (4QFY25) core net profit, reaching RM14 million, a 50.1% year-on-year (YoY) rise. This performance was primarily fueled by robust contributions from its optical segment, despite headwinds in the food and beverage (F&B) division. The cumulative full-year (FY25) earnings notably surpassed both the investment bank’s and consensus forecasts by 111% and 108% respectively, underscoring strong operational execution.
Performance Review
The strong 4QFY25 performance saw revenue climb 9.2% YoY to RM91.2 million, largely underpinned by a 12.5% YoY increase in optical segment sales. This growth was attributed to higher corporate customer sales within the optical division. Conversely, the F&B segment experienced an 8.3% YoY revenue decrease, reaching RM11 million, due to lower corporate sales in that area.
The substantial growth in core net profit was a direct result of the optical segment’s strong corporate sales and improved operational efficiency, along with scale benefits. The optical segment’s Profit Before Tax (PBT) surged 67.5% YoY to RM18.8 million, with its PBT margin expanding significantly by 7.8 percentage points YoY to 23.7%. However, these gains were partially offset by losses incurred in the F&B and other segments, which faced higher operating costs and write-downs. The PBT margin outperformance in the optical segment was a key factor in the overall earnings beat.
Future Outlook
The investment bank maintains a positive outlook, anticipating continued resilient consumer demand and strategic geographical expansion through new store openings. The company plans to add approximately 20 new stores in FY26, with three already operational by January 2026. Factors such as a favorable labor market, targeted assistance programs, and robust tourism activities under Visit Malaysia 2026 are expected to support consumer spending.
In the long term, growth is expected to be driven by increasing vision care awareness among consumers, influenced by an aging population and changing lifestyles involving increased screen exposure. Furthermore, the F&B segment is projected to gradually recover, bolstered by ongoing efforts to secure new corporate clients and introduce new product offerings.
Given these positive developments, the investment bank reiterates its “Outperform” recommendation, with the target price maintained at RM0.57, based on approximately 9x FY26F EPS.
