Analyst Pin-board CTG – Continued pressure in the short-term
- CTG reported resilient income but moderate earnings growth due to major pressure from provisions.
- We revise down earnings estimates for the 2021-2022 period. 2021 NII was revised down by -2% to price in the scale of ongoing supportive interest rate package, while that of 2022 is maintained thanks to higher projected credit growth and lower yield of newly issued bonds. The forecasted 2021-2022 NFIs are shifted down by -4% as we think the bancassurance model is vulnerable to disruptions. The credit cost margin curve is conservatively revised upward to price in the pandemic’s impact, the lag of NPL formation and the uncertainty of the recovery. 2021-2022 PBTs are forecasted at VND 20.5 tn (USD 891 mn, +20% YoY) and VND 23.8 tn (USD 1.0 bn, +16% YoY), down -15% and -13% from our prior projections respectively.
- The volatility in earnings come from the sensitivity to credit cost margin and the concentration risk of large corporate loans. This might lead to a large discount on valuation multiple depending on the business cycle. The revised 2021-2022 book value per share figures are VND 20,327 and VND 22,645 respectively. We adjust downward the 1-year target price by -1% to VND 39,900/share and maintain a BUY recommendation. This translates to an upside of 24% from the closing price of November 17 2021
Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) is a Vietnam-based and state-owned financial institution. The Bank provides commercial banking services for individuals and corporate clients. It is also engaged in the provision of international clearing services and money transfer services. Moreover, the Bank provides derivative products, such as futures, forwards, swaps and options. Other operations include financial leasing activities and the offering of guarantee services, insurance services and securities related services.
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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