Result Update Report: VCB - Resilient amidst uncertainties
Macroeconomic conditions might be tougher in 2023, risk of real estate and corporate bond market remains even though some bottlenecks have been released to protect the banking system. However, we expect VCB to be able to weather the storm amid uncertainties and maintain sustainable profit growth. In the medium term, Circular 26 tends to benefit SoCBs on the funding side which also be the short-term catalyst. In addition, the private placement in 2024, CAR is expected to expand by roughly 200 to 250 bps, which will lay down the foundation to sustain VCB’s earnings onwards.
We maintain a positive view of VCB’s provisioning buffer and advantages on the funding front. Amidst rising uncertainties, we believe that VCB will be the last vulnerable bank thanks to the top-tier provisioning buffer and healthy balance sheet. Alongside with growth momentum of net interest and non-interest income, VCB will sustainably grow in the medium term. Therefore, we revise our target price to VND 107,000/share, implying a 2023 PBR of 3x. This is equivalent to an BUY recommendation with an upside of 22% from the closing price of April 12th, 2023.
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.
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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