Report

Analyst Pin-board HDB – Lower-than-expected quota but positive surprise in asset quality

  • After 11M2021, HDB reached approximately 13% credit growth. This is in line with the lower-than-expected granted credit quota. SBV is expected to approve for more credit growth in December 2021. We factor in a 20% credit growth for 2021, equivalent to another raise during the rest of the year.
  • We revise down NIM estimates. Asset quality was slightly impacted in 3Q21. The NPL ratio rose and restructured loans decreased to the lowest level among our bank coverage. Combined with the guidance on provisioning policy, we revise down the forecasts on credit cost. 2021-2022 PBTs are adjusted upward to VND 8.0 trillion (USD 346 mn, +37% YoY) and VND 10.3 trillion (USD 448 mn, +29% YoY).
  • We maintain our cautious view on the provisioning policy and its buffer. 2021-2022 book values per share are at VND 14,343 and VND 18,128 respectively. We expect HDB to regain growth momentum in the next few quarters thanks to a low base effect and easing pressure on credit cost margin. We increase the target price by 11% to VND 32,000/share. This translates to an upside of 6% from the closing price of December 14, 2021 and an ACCUMULATE recommendation.
Underlying
Ho Chi Minh City Development Joint Stock Commercial Bank

Ho Chi Minh City Development Joint Stock Commercial Bank is a Vietnam-based financial intermediary. The Company is primarily involved in commercial banking activities, including accepting deposits; granting personal and business loans; issuing debit and credit cards, and providing remittance, letter of credit and debt collection services. The Company's other undertakings consist of foreign exchange dealing, stock trading and equity investing.

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
Son Tran

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