COMPANY UPDATE
Monday, July 21, 2025
FBMKLCI: 1,525.86
Sector: Consumer
Focus Point Holdings Berhad
Aggressive Store Expansion this Year
Key highlights from our recent discussion with Focus Point’s management include:
On Track to Exceed FY24 Sales
Management remains confident in sustaining its growth momentum for FY25, particularly the optical segment—which accounted for 83.7% of IQ25 sales, buoyed by robust demand stemming from an aging population and the widespread prevalence of myopia among Malaysians. To recap, Focus Point’s optical segment sales climbed 7.4% to RM61.1mn in IQ25, boosted by strong performances across both corporate (+74.2% YoY to RM5.7mn) and retail channels (retail outlets +0.7% to RM50.8mn; franchise sales +66.9% YoY to RM3.3mn).
The number of corporate optical customers grew to 746 in IQ25, up from 625 in 3Q24, with further growth expected as the group collaborates with third-party administrators to secure new clients and boost recurring sales. Additionally, the group opened five wholly-owned stores in IH25-located at Karamunsing, Aeon Taman Maluri, Mitsui Sepang, IOI Damansara, and Sunway Carnival. Looking ahead, Focus Point aims to open up to 10 new optical outlets in FY25 (compared to a net increase of four in FY24) and refurbish 6 to 8 existing branches. The group is also targeting expansion in East Malaysia, with plans for a flagship concept store in Bintulu and a new outlet in Miri slated for 3Q25.
Separately, Focus Point remains committed to championing vision care awareness through continued investments in advanced primary eyecare equipment and engaging community roadshows focused on eye health education.
F&B Sales to Continue Growing
The F&B segment of Focus Point reported a higher loss before tax (LBT) of RM0.7mn in IQ25, compared to RM0.Imn in IQ24, primarily due to elevated operating costs despite a 5.1% increase in revenue to RM10.9mn. The growth was mainly driven by retail sales, which rose 18.7% YoY to RM6.Imn, supported by the opening of four new Komugi outlets and robust marketing efforts. It is worth noting that newly launched Komugi outlets typically take between 1 to 3 years to break even, depending on factors such as location and average transaction size. The group targets to open 2-3 more new Komugi outlets in Klang Valley this year.
Meanwhile, corporate sales declined 8.5% YoY to RM4.5mn, impacted by reduced orders during Ramadan and the full effect of Ramadan falling within IQ25, compared to only a 9-day spillover in 2Q24.
Looking ahead, we expect corporate sales to recover, supported by the onboarding of a new corporate client and increased sales to existing clients.
| Share Information | |
|---|---|
| Bloomberg Code | FPHB MK |
| Stock Code | 157 |
| Listing | Main Market |
| Share Cap (mn) | 462.0 |
| Market Cap (RMmn) | 337.3 |
| 52-wk Hi/Lo (RM) | 0.87/0.7 |
| 12-mth Avg Daily Vol (‘000 shrs) | 502 |
| Estimated Free Float (%) | 41.1 |
| Beta | 0.8 |
| Major Shareholders (%) | |
| Liang Liaw Choon | 37.6 |
| Goh Poi Eong | 12.9 |
| Perbadanan Nasional Bhd | 8.4 |
| Forecast Revision | FY25 | FY26 |
|---|---|---|
| Forecast Revision (%) | 0.0 | 0.0 |
| Net profit (RMm) | 35.4 | 38.7 |
| Consensus | 38.6 | 43.0 |
| TA’s / Consensus (%) | 92 | 90 |
| Previous Rating | Buy (Maintained) | |
| Consensus TP (RM) | 1.06 | |
| Financial Indicators | FY25 | FY26 |
|---|---|---|
| Net gearing (x) | Net cash | Net cash |
| CFPS (sen) | 3.8 | 4.2 |
| ROA (%) | 11.4 | 11.9 |
| ROE (%) | 23.2 | 22.5 |
| NTA/Share (RM) | 0.3 | 0.4 |
| Price/ NTA (x) | 2.2 | 2.0 |
| Share Performance (%) | ||
|---|---|---|
| Price Change | FPHB | FBM KLCI |
| 1 mth | 0.0 | 0.9 |
| 3 mth | 0.7 | 1.8 |
| 6 mth | (9.9) | (2.6) |
| 12 mth | (13.6) | (6.6) |
(12-Mth) Share Price relative to the FBMKLCI
Source: Bloomberg
Rising Cost due to SST
The Malaysian Retail Chain Association (MRCA) expects the 8% Sales and Service Tax (SST) on commercial rental and leasing services to increase operating expenses, which may in turn, impact consumers through higher inflation and weakened consumer confidence. Based on our estimates, Focus Point pays approximately RM35–40mn in rent annually. As a result, the 8% SST would increase its costs by RM1.4-1.6mn in FY25, representing about 4.2% of our projected FY25 profit.
Separately, we expect the group’s electricity costs to trend slightly higher due to the new tariff. However, the impact is expected to be insignificant, as electricity accounts for less than 3% of the group’s total costs.
All in all, we believe the impact of the SST is manageable, supported by resilient demand for vision care services. Combined with the company’s strong bargaining power with suppliers and a stronger Ringgit, we believe that the gross profit margin will remain resilient.
Forecast
No change to our FY25-27 earnings projections.
Valuation & Recommendation
We reiterate our Buy recommendation on the stock with an unchanged TP of RM1.09 based on a PE multiple of 13.0x CY26 EPS. Dividend yield is decent at 5.2% for FY25.
Figure 1: Total Optical Outlets
| Optical Stores | FY2023 | FY2024 | 1Q25 |
|---|---|---|---|
| FOCUS POINT | 137 | 138 | 139 |
| FOCUS POINT | 7 | 8 | 9 |
| FOCUS POINT CONCEPT STORE | 14 | 14 | 14 |
| FOCUS POINT OUTLET | 1 | 1 | 1 |
| FOCUS POINT | 2 | 1 | 1 |
| i-Focus | 1 | 1 | 1 |
| Opulence | 4 | 3 | 3 |
| whoosh | 21 | 21 | 21 |
| eyefont | 1 | 1 | 1 |
| FOCUS POINT SIGHTSAVERS | 2 | 4 | 5 |
| ANGGUN OPTOMETRIS | 5 | 7 | 7 |
| Wholly Owned Outlets | 130 | 132 | 134 |
| Franchise/ Licensed Outlets | 65 | 67 | 68 |
| Total | 195 | 199 | 202 |
Source: Company, TA Securities
Figure 2: Newest Optical Outlet at The Spring, Bintulu
Source: Company, TA Securities
Earnings Summary
P&L (FYE Dec, RM mn)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Revenue | 260.9 | 292.5 | 312.9 | 334.4 | 351.0 |
| EBITDA | 88.2 | 93.5 | 100.4 | 102.2 | 101.2 |
| Depreciation & amortisation | (43.8) | (45.3) | (47.6) | (46.1) | (44.0) |
| Net finance cost | (4.4) | (4.5) | (6.0) | (4.9) | (4.1) |
| PBT | 39.9 | 43.7 | 46.9 | 51.1 | 53.1 |
| Taxation | (9.7) | (10.5) | (11.5) | (12.4) | (12.9) |
| MI | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| PAT (-MI) | 30.2 | 33.2 | 35.4 | 38.7 | 40.3 |
| EPS (sen) | 6.5 | 7.2 | 7.7 | 8.4 | 8.7 |
| DPS (sen) | 3.0 | 3.5 | 3.8 | 4.2 | 4.4 |
Balance Sheet (FYE Dec, RM mn)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| Fixed assets | 53.6 | 60.7 | 66.2 | 65.0 | 64.2 |
| Others | 89.6 | 89.5 | 83.9 | 79.5 | 76.8 |
| LT assets | 143.2 | 150.2 | 150.1 | 144.5 | 141.0 |
| Inventories | 60.7 | 60.7 | 65.2 | 69.7 | 60.5 |
| Trade receivables | 39.6 | 45.4 | 37.7 | 40.3 | 43.3 |
| Cash | 37.4 | 38.5 | 57.2 | 69.7 | 95.2 |
| Others | 2.3 | 0.4 | 0.4 | 0.4 | 0.4 |
| Current assets | 140.0 | 145.0 | 160.5 | 180.0 | 199.3 |
| Total assets | 283.2 | 295.3 | 310.7 | 324.5 | 340.4 |
| Trade payables | 34.1 | 28.1 | 34.7 | 36.4 | 38.2 |
| ST borrowings | 17.8 | 18.5 | 19.3 | 15.9 | 12.6 |
| Others | 41.5 | 36.6 | 32.9 | 30.6 | 29.3 |
| Current liabilities | 93.4 | 83.2 | 86.9 | 83.0 | 80.2 |
| LT borrowings | 17.2 | 16.9 | 11.0 | 9.4 | 7.8 |
| Others | 54.6 | 60.1 | 60.1 | 60.1 | 60.1 |
| LT liabilities | 71.8 | 77.1 | 71.1 | 69.5 | 68.0 |
| Total liabilities | 165.2 | 160.2 | 157.9 | 152.5 | 148.2 |
| Share capital | 40.1 | 40.1 | 40.1 | 40.1 | 40.1 |
| Retained Earnings | 77.9 | 94.9 | 112.6 | 132.0 | 152.1 |
| Others | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total equity | 118.0 | 135.0 | 152.7 | 172.1 | 192.2 |
| Total liabilities and equity | 283.2 | 295.3 | 310.7 | 324.5 | 340.4 |
Cash Flow (FYE Dec, RM mn)
| FY23 | FY24 | FY25F | FY26F | FY27F | |
|---|---|---|---|---|---|
| PBT | 39.9 | 43.7 | 46.9 | 51.1 | 53.1 |
| Depreciation and amortisation | 8.9 | 9.6 | 47.6 | 46.1 | 44.0 |
| Others | 12.8 | 19.8 | (1.7) | (17.8) | (4.9) |
| Operational cash flow | 61.6 | 73.1 | 92.8 | 79.5 | 92.3 |
| Capex | (13.2) | (14.1) | (15.0) | (8.0) | (8.0) |
| Others | 14.3 | 5.0 | 0.0 | 0.0 | 0.0 |
| Investing cash flow | 1.1 | (9.1) | (15.0) | (8.0) | (8.0) |
| Net share issue | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Dividend paid | (13.9) | (16.2) | (17.7) | (19.3) | (20.1) |
| Others | (48.9) | (45.8) | (41.3) | (39.7) | (38.6) |
| Financial cash flow | (62.7) | (62.0) | (59.0) | (59.0) | (58.8) |
| Net cash flow | (16.6) | 1.1 | 18.7 | 12.5 | 25.5 |
| Opening cash flow | 54.0 | 37.4 | 38.5 | 57.2 | 69.7 |
| Closing cash flow | 37.4 | 38.5 | 57.2 | 69.7 | 95.2 |
Ratios (FYE Dec)
| Ratio | FY23 | FY24 | FY25F | FY26F | FY27F |
|---|---|---|---|---|---|
| Valuations | |||||
| PER (x) | 11.2 | 10.2 | 9.5 | 8.7 | 8.4 |
| Dividend yield (%) | 4.1 | 4.8 | 5.2 | 5.7 | 6.0 |
| Profitability ratios (%) | |||||
| ROAE | 25.6 | 24.6 | 23.2 | 22.5 | 21.0 |
| ROAA | 10.6 | 11.2 | 11.4 | 11.9 | 11.8 |
| EBITDA margin | 33.8 | 32.0 | 32.1 | 30.6 | 28.8 |
| PBT margin | 15.3 | 14.9 | 15.0 | 15.3 | 15.1 |
| Liquidity ratios (x) | |||||
| Current ratio | 1.5 | 1.7 | 1.8 | 2.2 | 2.5 |
| Quick ratio | 0.5 | 0.5 | 0.6 | 0.7 | 0.9 |
| Growth ratios (%) | |||||
| Sales | 4.9 | 12.1 | 7.0 | 6.8 | 5.0 |
| PBT | (16.7) | 9.6 | 7.2 | 9.1 | 3.9 |
| PAT (-MI) | (15.9) | 10.1 | 6.7 | 9.3 | 4.1 |
| Total assets | 4.4 | 4.3 | 5.2 | 4.5 | 4.9 |
Sector Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to 12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
BUY: Total return of the stock exceeds 12%.
HOLD: Total return of the stock is within the range of 7% to 12%.
SELL: Total return of the stock is lower than 7%.
Not Rated: The company is not under coverage. The report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from total return if dividend discount model valuation is used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Environmental | Social | Governance | Average | |
|---|---|---|---|---|
| Scoring | ★★ | ★★ | ★★★ | ★★★ |
| Remark | Direct environment impact is limited. Using LED to reduce the overall energy consumed. | Does CSR campaign and donations. Proper training provided to workers. | Fair governance practices. Rewards shareholders with good dividends. | |
| ★★★★★ (≥80%) | Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price | ||
| ★★★★ (60-79%) | Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price | ||
| ★★★ (40-59%) | Adequate integration of ESG factors into operations, management and future directions. | No changes to target price | ||
| ★★ (20-39%) | Have some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price | ||
| ★ (<20%) | Minimal or no integration of ESG factors in operations and management. | -5% discount to target price | ||
