KUALA LUMPUR (Feb 8): RHB Investment Bank has initiated coverage on Focus Point Holdings Bhd (FPHB) with a “buy” rating at 70 sen and a target price (TP) of RM1.02, as it sees the company capitalising on the rising myopic population thanks to its market leadership and entrenched network.

In a note on Thursday, the research house said it foresees a more stable earnings outlook for the F&B unit after the accumulation of valuable experience over the years and with sound expansion plans in place.

“Trading at a more than 50% discount to peer average, the current valuation has yet to price in FPHB’s solid business fundamentals, exciting growth prospects, superior profitability, and ROE,” it said.

RHB IB forecast FPHB to grow at a five-year compound annual growth rate of 30% to RM40.2 million in FY2025F — driven by the steady demand for optical and F&B products, outlet expansions, healthy SSSG and market share gains.

“Our RM1.02 TP implies a 13.5x FY24F P/E, and is in line with comparable listed consumer retail peers. This is justified by its market leadership position, structural growth in eyewear industry, and above-industry margins and ROE.

“We apply a 4% discount to reach our TP, based on its ESG score of 2.8,” it said.