Report
Viet Dragon Securities
Tam Pham

ACB – Stand Still in the Coming Storm

  • ACB posted an earnings growth of 71% YoY in Q3/22 driven by high growth in net interest income, service income, slower growth in operating expenses and provision expenses fell sharply.
  • Asset quality was slightly deteriorated due to the expiration of Circular 14 but restructured customers continued to recover and provision buffer remained high. Profit performance was not impacted as the bank has fully provisioned the entired structured loans last year. Besides, ACB is one of the a few banks in our coverage that are least affected by the ongoing adjustments in the real estate sector and harsh macroeconomic conditions, owing to low exposure to the sector.
  • Q4/22 performance will continue to be healthy as in Q3 and will make a high growth on the low comparison base of Q4/21. For 2023, we see more constraints to the growth momentum of the bank including low credit growth, quickly rising interest rate, high mobilizing pressure and higher credit costs (compared to the low base of 2022).
  • The forecast of PBT for 2022-2023 are VND 18,113 billion (+51%) and VND 19,958 billion (+12%), respectively. Corresponding book value per share are estimated at VND 18,586 and VND 21,316. As we reduce the ROE of 2022-2023 and raise valuation factors of discount rate and lower P/B target to factor in the high capital cost environment and the market worsened sentiment to the banking system, the target price is revised to VND 29,200/share, down 32% from the previous valuation. This translates to an upside of 7% from the closing price of November 9, 2022, and an ACCUMULATE recommendation.
09/11/2022 8 EN
Underlying
Asia Commercial Bank
Asia Commercial Bank

Asia Commercial Joint Stock Bank (ACB) is a Vietnam-based financial institution. The Bank provides consumer and corporate commercial banking services, including deposits, corporate and consumer lending, as well as trade financing. It is also involved in capital and money markets at interbank level, along with treasury activities, commodities financing and international clearing and settlement. Through its subsidiaries and affiliates, the Bank provides investment banking services, such as securities brokerage, custody and underwriting services, along with corporate advisory services. Other activities include gold bar manufacturing and asset management.

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VN000000ACB8 Hochiminh Stock Exchange Vietnam
Provider
Viet Dragon Securities
Viet Dragon Securities

​Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.

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Analysts
Tam Pham

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