Analyst Pin-board: ACB – Update on 1H2020 performance
It seems that ACB only achieved a modest earnings growth in 1H2020 because of (1) lower NII growth due to a small NIM compression, and (2) provision booking escalation which off-set service income expansion. We believe that the 2H outlook would be supported mainly by (1) credit growth recovery, (2) collection of Cir. 01 which include debt restructuring, and especially (3) the dramatic expansion momentum of bancassurance fees, with downside risk being the impact of the second wave of Covid-19 which constraints recovery and the easing of credit costs. Earnings growth should also be supported by income from the exclusive bancassurance agreement and ACBS divestment, as well as the collection of G6 legacy debts. Although we think these anticipated income sources could actually slip in 2021. The transfer to HOSE expected by late 2020-early 2021 is also a short-term catalyst for the stock.
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