Report

Analyst Pin-board VCB – Beating expectations, preparing for the private placement

  • 4Q21 earnings beat our forecasts by 11% (VND 8.1 trillion versus VND 7.3 trillion in PBT) due to extensive cost reduction. Total operating income was somewhat up to expectations with a 1% deviation, while provisions were higher than our projections given the deterioration of an interbank loan. For the whole year, VCB reported VND 27,372 bn (USD 1.2 bn, 19% YoY) in PBT, exceeding our estimates by 3%.
  • We revise up our 2022-2023 projections as a result of the better-than-expected figures. We make major changes in the forecasts of CASA, funding costs, deposit growth, credit costs and service income. Ultimately, 2022-2023 PBT is revised up by 11% and 1% to  VND 36,758 bn (USD 1.6 bn, 34% YoY) and VND 41,035 bn (USD 1.8 bn, 12% YoY), respectively.
  • We factor in the private placement deal in 2022 with conservative inputs. We come up with a new forward 2022 book value per share at VND 39,709. The target price is revised up by 23%, at VND 112,800/share as a result of the private placement to foreign investors and robust earnings growth in the base case. This is equivalent to a BUY recommendation and an upside of 29% from the closing price of February 17, 2022.

 

Underlying
Joint Stock Commercial Bank for Foreign Trade of Vietnam

Joint Stock Bank for Foreign Trade of Vietnam is a commercial bank. Through its subsidiaries, Co. is engaged in banking transactions, including mobilizing short, medium and long term deposits from economic entities and individuals; providing short, medium and long term loans to various economic entities and individuals; conducting foreign exchange transactions; international financial and commercial services; discounting commercial notes, bonds and other valuable papers and other banking services. As of Dec. 31, 2012, Co. has about 400 branches/ transaction offices/ representative office/ affiliates both in Vietnam and abroad.

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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