Investing Talk #37: FPT Business

1. Company overview

• FPT Corporation is a major Vietnamese technology and telecommunications company, originally founded in 1988. Wikipedia+2FPT+2

• Headquarters: Hanoi, Vietnam. FPT Telecom+1

• Operations span globally: it serves clients in 30 countries, with a workforce of over 50,000 employees as of 2024. FPT Telecom+1

• The company has diversified into several business areas: technology/services (software, IT services), telecommunications (internet, data services) and education/training. Wikipedia+1

2. Core business & segments

FPT’s businesses can be broadly divided into these segments:

• Technology / IT Services (via subsidiary FPT Software): This includes software development, system integration, outsourcing, cloud services, AI solutions, digital transformation for global clients. Wikipedia+1

• Telecommunications / Internet Services (via FPT Telecom and other units): Providing internet, broadband, data centre services in Vietnam, plus some global operations. FPT Telecom+1

• Education & Training: Developing human resource capacities, training for technology, supporting FPT’s internal talent pipeline and external education services. FPT Software+1

Additionally, FPT is moving into newer high-growth fields: AI / machine learning, semiconductors/chips, automotive software, digital transformation platforms. FPT Software+1

3. Business model / How it makes money

• The IT services business earns revenue via software outsourcing contracts, global IT service engagements, consulting and digital transformation projects for enterprise clients. For example, FPT Software reported > US$1 billion in global IT services revenue in 2023. FPT Software

• The telecommunications segment earns via subscription/broadband services, data centre services, telecom infrastructure and possibly value-added services in Vietnam. FPT Telecom

• The education/training segment contributes by training internal and external talent, helping FPT scale its global delivery and services business.

• FPT’s strategic move into AI, semiconductor, automotive software implies future revenue streams from higher-value, more advanced technology services (for example, software-defined vehicles, AI factories, chip design). FPT Software+1

4. Financials & performance highlights

• Revenue for 2024: VND 62,849 billion (~US$2.7-3.0 billion) according to FPT’s “About Us” page. FPT

• Growth metrics: FPT reported compound annual revenue growth of ~21% from 2020-2023, and average ROE above ~25% over recent years. FPT Digital

• In 2023, the global IT services arm (FPT Software) exceeded US$1 billion in revenue. FPT Software

• Strategic investment: Example – FPT plans to invest US$200 million in an AI factory using NVIDIA chips. Reuters

5. Strategic strengths

• Vietnam-based global delivery model: Lower cost base yet global reach; this supports exports of IT services.

• Growing technology focus: With AI, cloud, semiconductors and automotive software, FPT is aligning with global tech trends.

• Diversified business portfolio: Not reliant on just one line (software services, telecom, education).

• Strong domestic presence & brand: Leading private technology firm in Vietnam.

• Talent pipeline: Through education/training units, FPT builds the skills required for its global ambitions.

6. Key risks & challenges

• Global competition: In IT services, FPT competes with larger global firms (India, Philippines, Eastern Europe) which could pressure margins.

• Technology leap required: Moving into semiconductors, AI factories and automotive software is capital-intensive and risky; execution matters.

• Regulatory & geopolitical risk: Telecom/internet services are sensitive to government policy (for example, recent news about FPT Telecom and national security involvement). Reuters

• Scale & profit margin challenge: Growth in revenue is strong, but maintaining high margins while investing heavily (AI/semiconductors) is challenging.

• Talent retention/skill shortage: Rapid expansion globally and into new tech domains requires high-quality talent which is competitive.

7. What to watch / strategic priorities

• Expansion of global IT services: How many Fortune 500 clients does FPT win; how much of revenue comes from export markets rather than domestic.

• Progress in AI / semiconductor / automotive software: Does FPT deliver on its “all-in” strategy (AI factory, chip design) and gain meaningful revenue.

• Telecommunications business stability & growth: How FPT Telecom navigates regulatory changes and invests in infrastructure (e.g., undersea cables).

• Profitability and return on equity: With heavy investment, monitoring ROE, margins and return on invested capital will be important.

• Talent & workforce development: Scaling from ~50k employees and global footprint will require infrastructure, culture, training.

• Market & stock performance: Given FPT is listed (Vietnam stock exchange), watch how the market values its global ambitions, growth, risk and diversification.

8. Summary

In short, FPT Corporation is a leading Vietnamese tech firm with strong ambitions to grow globally and move into high-value tech domains (AI, automotive software, semiconductors) beyond its core software services and telecom business. It has good growth momentum and solid positioning, but faces significant execution and competitive challenges. For an investor or business partner viewpoint: the key question is whether FPT can successfully transition from being primarily a software/IT services exporter and telecom domestic champion to a global tech player in more advanced and higher-margin domains.