The IT sector appears promising

FPT has set a positive business plan for 2022, with revenue from the technology, telecommunications, and education segments increasing by 21.1%, 14.8%, and 32.5%, respectively.

In 2021, the demand for IT around the globe increased significantly. Gartner predicts that global technology consumption will grow at 4% and 5.5 percent in 2022 and 2023, respectively. In 2021, it is expected to rise by 9.5 percent year on year. With its strength in human resource quality and affordable labor prices, Vietnam is a strong driving force for software export activities.

Domestic digital transformation is taking place rapidly in both the business sector and the public administration sector. Provinces such as Bac Can, Binh Phuoc, Thanh Hoa, Son La, and Kon Tum have coordinated with businesses to perform digital transformations, data-driven approaches, and use 4.0 technology, cloud technology, AI, and the internet of things.

The telecommunications segment is expected to grow steadily thanks to an increase in broadband internet subscribers (up 8–10%) and the rising growth of the OTT TV segment as the demand for entertainment via OTT TV in Vietnam increases.

Besides, the development of mobile broadband, including 4G-5G, will be a breakthrough for telecommunications businesses.

Mr. Tran Duc Anh, Head of Macro & Strategy at KB Securities believed that IT companies would continue to maintain double-digit growth in 2022. Investors should consider stocks with strong software export and digital transformation activities and attractive valuations, such as FPT Group (FPT) and CMC Corp (CMG).

As for FPT, this company has set a positive business plan for 2022, with revenue from the technology, telecommunications, and education segments increasing by 21.1%, 14.8%, and 32.5%, respectively. Profit before tax should reach VND7,618 billion, up 20.2% YoY in 2022, and the investment cost is about VND4,000 billion.

At the FY22 AGM, the Board of Directors approved the plan for dividend payment for 2021 in 3Q22, including a cash dividend payment at the rate of 20% and a stock dividend payment at the rate of 20%.

"We recommend buying FPT stock based on valuation results, business outlook, and possible risks. The target price is VND137,800/share, 23.3% higher than the closing price on June 1, 2022," said Mr. Tran Duc Anh.

As far as CMG is concerned, in the period of 2021–2025, this company aims to become a global enterprise with billions of US dollars in revenue and over 10,000 employees, three times higher than the current one. In the process of working with partner McKinsey, CMG identified 20 initiatives in 3 key blocks: technology solutions, international business, and telecommunications services.