Focus Point - worth for investment?

 

I am myopic since 10 years old. Now am I am 45.

When I was 25 years old, my younger sister brought me to Focus Point in the Curve to buy a pair of branded glasses. I forgot the brand of the glasses already. But, I remember that the price of my glasses was around RM 800++. Pretty expensive for me. Since then, my first impression to Focus Point is --> high-class & expensive (not my taste). 

I never thought to buy the shares of Focus Point (FOCUSP) all this while, until I found out from HLIB's analyst report about this company. After doing some analysis on FOCUSP's financial report, I found that its revenue and net profit historical data are as below:

It is listed in the ACE market of KLSE in 2010. Since then, its net profit is down-trending from 2010 to 2018, although the revenue is growing. Interestingly, after 2018, both revenue and net profit have experienced a noticeable growth. Indeed, I am curious on why this could happen as optical industry is highly competitive. So, I dig into its Annual Report 2018 and found the following statements from the Chairman:

Thus, to bring focus back to our business, our fellow board members together with the management team and we have pushed through five main strategies so that we can have a more sustainable business:

 1. Upgrading our malls in areas where population growth is still prominent; 

2. Careful selection of our growth areas and launching our own e-commerce site; 

3.  Smarter procurement to match the changing lifestyle needs of our consumers; 

4.  Investing in human capital to support both our wholly owned and franchise business’; and  

5.  Aligning, and initiating cost management processes for managing and expanding the food and  beverage business.

If I understand correctly, the Management has been very selective in picking up locations for establishing new branches. Also, they would invest in upgrading the shops (in selected hot locations) to make them more appealing to potential customers. Cost management (smart procurement) is another way out, and the Management would find ways to expand the franchise and F&B business. 

Now, let us zoom into the CAGR of its business segments from 2018-2024. There are 3 business segments of FOCUSP, i.e. optical (main), F&B (Komugi) and franchise (mainly optical, I think).

One thing that has grasped my attention is its optical business. Although its revenue growth  is only 7%, its PBT growth is recorded at 24%!! This may indicate the cost management strategy implemented by the Management team is working well. The similar trend has been observed for its franchise segment. This is pretty amazing. Its F&B revenue experienced a double digit growth as well; however, this segment's profitability is hardly predictable. Sigh... bakery industry is high competitive.

I have also studied the number of optical retail outlets of Focus Point. Up to 2025, there are about 200 outlets in Malaysia. There are many types of optical retail outlets of Focus Point, targeting different market segments. Table below shows the number of outlets of the main types:

Can you see the pattern? Since 2018, the number of Concept Store has experienced a double digit growth, a whopping 23%!! As compared to other types of retail outlets, they are hardly growing in number. Management could believe that Concept Store could attract more sales as compared to other types of retail outlets, hence, they have been trying to grow the number of concept stores. I went into the Focus Point Concept Store in IPC yesterday (21 March 2026). Basically, all kinds of Focus Point optical products are housed in the Concept Store, ranging from the affordable (Whoosh) to luxurious (branded, e.g. BOSS, OAKLEY, etc.) one. I believe most customers would find it easier to find their desired glasses in the Concept Store. My daughter told me that the glasses there are trendier than other ordinary eyewear shops in United Point Kepong, as she finally found her preferred frame in the Focus Point Concept Store in IPC. She has her new Whoosh glasses readied in 30 minutes (Original Price: RM 288 Frame + Lens (UV & thin) + RM 100 (Blue-ray) = RM 388). As I am a MiCare member, I am entitled for another 10% discount (so I paid RM 349).

I have asked my daughter what's her experience when doing eye-power checking in the dark room. I did not manage to enter the room as I am filling out the optical form. She mentioned that the staff has performed a more thorough checking on her eyes as compared to the eyewear shop in United Point Kepong. The staff also check the focal points on her left and right eyes using a separate machine, before assembling the glasses. My wife did a free eye-check also on her eye pressure. I remembered that the CEO of FOCUSP once said he is offering differentiation in terms of service offered.

How about its Free Cash Flow (FCF)? One should note that a healthy company should pay dividends from FCF, not from bank borrowings. All this while, Focus Point is able to generate +FCF since 2014, which is commendable. More interestingly, its FCF generation capability is significantly stronger after FY2018. In FY2025, the total dividends given is RM0.0356/share * 616M shares = RM22M (only 30% of its FCF in FY2025 of ~ RM 74M). No wonder Focus Point has recently revised its dividend policy to become 50%.

Valuation

I have studied the PER of Focus Point during the years when its net profit is growing. Based on the median PER values of years 2020, 2021, 2022, 2024 and 2025, the median PER is ~11.2. So, the fair value would be around PER x Estimated EPS (=RM 0.0569) = RM 0.63.

During the time of writing (22 March 2026), the share price is RM 0.485. So, the Margin of Safety (MOS) is around (RM 0.63 - RM 0.485) / RM 0.485 ~ 30%. It is very attractive for me personally.

Strength of FOCUSP:

1. Largest eyewear retail chain, enjoying economies of scale.
2. Many shops are available (nearly 200 as in FY2024). Easier accessibility.
3. Differentiation in eye-checking services.
4. Aging population, rising myopic cases amongst children.
5. Working with Third Party Administrator (TPA) like MiCare & other corporate partners to boost up sales.
6. Offers advanced and comprehensive eye-screening procedures which are hardly found in other ordinary eyewear shops.

Risk:

1. Stiff competition by other players. Recently, A-look was acquired by EssilorLuxottica, the largest  eyewear company in the world. If A-look is expanded further, it could pose a risk to the growth of FOCUSP.
2. Dragged by F&B business which is very competitive.