Analyst Pin-board VPB – High Credit Growth on Strong Capital Base
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· VPB announced 2021’s consolidated PBT was roughly VND 14,580 billion (+12% YoY), completing 88% of the year’s guidance, with the parent bank playing a leading role in growth while the unsecured consumer finance segment at FEC struggled in 2H2021. In detail, PBT of the parent bank surged by 50% YoY to VND 14,011 billion (excluding one-off income) and PBT of FE Credit (FEC) plummeted by 84% YoY to VND 610 billion. Thus, the parent bank contributed 96% and FC added 4% to the total PBT of VPB. · The strong increase in equity thanks to the sale of 50% of FEC at 2021-end and the private placement of 15% in 1H2022 will support credit growth. However, it still temporarily put pressure on ROE this year. VPB will announce the plan to use new capital sources in the near future and that may affect our forecast. · Given the adjustments to raise growth expectations of the parent bank and lower expectations at FEC based on the Q4 performance, combined with the forecast model of the 15% private placement deal which is likely to be completed in Q2/2022, we estimate the consolidated PBT in 2022 to reach VND 19,826 billion (+27%), of which PBT of the parent bank is VND 19,013 billion (-50% or +36% in terms of core profit) and FEC's is VND 2,167 billion (+255%). In 2023, high credit growth will remain while NIM recovers and credit costs decrease on the back of economic growth returning to pre-pandemic level, we expect consolidated PBT to reach VND 26,585 billion (+34%), of which PBT of the parent bank is VND 25,498 billion (+34%) and FEC’s will come at VND 3,622 billion (+67%). Book values per share are VND 23,001 for 2022 and VND 23,010 for 2023, respectively. · The target price of VPB, adjusted for the dilution after the private placement, was adjusted from VND 42,800/share to VND 46,200/share. Comparing the forward P/B at the end of 2022 of 1.7x and the end of 2023 of 1.5x with the current P/B of 2.0x, VPB is now trading at an attractive valuation. Based on the closing price on March 9, 2022, we recommend to BUY VPB with a total return of 26%. |
Vietnam Prosperity Joint Stock Commercial Bank is a Vietnam-based financial intermediary. The Company's leading business activities are commercial banking operations, including personal financing, enterprise lending, remittance services, foreign currency trading, card services, letters of credit and debt issuance and insurance, among others. The Bank also trades securities on its own account and invests in private equity.
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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