MBB – Growth momentum is going to slow down amidst economic uncertainties
- 4Q22 results witnessed a top-line growth of 16% YoY as the core income source sustained its momentum to reach VND 9.6 tn (or USD 0.4 bn), up by 34% YoY and accounted for 79% of total operating income. NFI declined 9% YoY to VND 1.2 tn (or USD 50mn). Despite the decline of 28% YoY in non-interest income growth, MBB recorded total operating income of VND 11.8 tn (or USD 490mn, 16% YoY) in 4Q22, favorably contributing to the bottom-line growth. On top of that, credit cost was the most notable factor dragging down PBT as provision expenses surged by 78% YoY. Altogether, PBT was down by 2% YoY in 4Q22, landing at VND 4.5 tn (or USD 189mn).
- The forecast of NPAT for 2023-2024 are VND 19,904(or USD 829mn, +14%) and VND 24,967 bn (or USD 1 bn, +25%), respectively. The book value will be 20,600 and 25,000, respectively. We see valuation pressure coming from the weak market sentiment and probability of non-performing loan formation yet the stock has come to attractive valuation.
- In the long run, as the bank’s core advantages on the interest income front regarding high yields and low costs of funds remain, coupled with potential from fee income sources including bancassurance and consumer finance segment, we expect MBB to return to its growth trajectory by riding on affordable funding costs when market conditions become more favorable in 2024. Our current target price is VND 22,000/share, offering an upside of 20% from the closing price of March 30th, 2023, hence we recommend to BUY this stock.
Military Commercial Joint-Stock Bank (MB) is a Vietnam-based financial institution. It is engaged in the offering of commercial banking services and derivative products. The Bank also acts as an insurance agent and provides related services. It is involved in the trading of bonds and other valuable papers, as well as the trading and processing of gold. In addition, the Bank is engaged in monetary intermediation activities. As of December 31, 2011, the Bank had five subsidiaries, three affiliates, one branch in Laos, one branch in Cambodia, 53 branches, 118 transaction offices, four saving funds and four transaction points in cities and provinces throughout Vietnam. As of the same date, its subsidiaries included MB Securities Joint Stock Company (MBS), MB Fund Management Stock Company (MBCapital) and MB Assets Management Company Limited (AMC).
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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