Analyst Pin-board CTG – Lower income momentum and rising tailwinds
- The 1H2021 performance was great in general, but profit before tax in the second quarter missed our expectations.
- We think of the surging provision expenses as a positive indicator for the provision buffers when considering the nature of the restructured debt. However, it does result in our revision of the 2021-2022 credit costs. Combined with a better-than-expected NIM and healthy growth of non-interest income, we revise up our projection for 2021 for total operating income after taking into account the upcoming headwinds. Therefore, 2021-2022 earnings are adjusted downward slightly, respectively at VND 24,742 (USD 1.1 bn, +45%) and VND 27,846 bn (USD 1.2 bn, +13%).
- We change the forward PB ratio discount on market multiple to premium as we think the bank has robust buffers in comparison to a banking sector facing pressure in the second half. Thereby, we have a positive short-term view and revise up the target price to VND 42,200/share. This is equivalent to an upside of +29% from the closing price of August 24th and a BUY recommendation.
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