FOCUSP: Optical Division Drives Resilience Amid Mixed Results, ‘BUY’ Rating Affirmed

Focus Point Holdings Berhad’s 9MFY25 net profit of RM22.7 million was viewed as within expectations, representing 64% of the investment bank’s full-year forecast and 62% of consensus estimates. This assessment is underpinned by the expectation that the fourth quarter typically stands as the strongest due to seasonality. The company also declared a second interim dividend of 1.5 sen per share, bringing the year-to-date payout to 2.81 sen per share, equivalent to a 5.5% dividend yield.

Performance Review

Despite a 5.3% year-on-year increase in sales to RM220.2 million, the group’s 9MFY25 net profit experienced a 5.5% year-on-year decline. This weaker performance is primarily attributed to increased losses within the F&B division, rising operating costs, and a higher effective tax rate, which climbed 2.6 percentage points year-on-year to 27.6%.

In contrast, the optical business demonstrated robust growth and resilience, with its profit before tax (PBT) for 9MFY25 rising 9.8% to RM34.3 million. This strong performance was driven by enhanced corporate sales, improved supplier rebates, and diligent cost efficiencies.

Quarter-on-quarter, 3QFY25 saw a 2.4% increase in revenue to RM74.5 million. However, PBT for the quarter declined by 19.9% to RM9.2 million. This quarterly dip was largely due to a softer performance in the optical segment, where the PBT margin decreased by 4.7 percentage points to 16.1%, partly as 2QFY25 had benefited from a timing advantage in supplier rebates.

Future Outlook

The group remains committed to its strategic expansion, aiming to open up to 10 new wholly-owned optical outlets in FY25, following a net increase of four outlets in FY24. Analysts expect that the robust, inelastic demand for optical products, coupled with a growing base of corporate clients, will continue to sustain the earnings growth momentum for this division.

Regarding the F&B division, the segment is anticipated to show continuous improvement, fueled by the onboarding of new corporate clients and tighter cost controls. The investment bank has made no changes to its earnings estimates based on these factors.

Valuation and Recommendation

TA Securities maintains a “BUY” recommendation on the stock with an unchanged target price (TP) of RM0.75 per share, predicated on 12.0x CY26 EPS. The firm continues to hold a positive view on the company due to its resilient optical business and attractive dividend yield.