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- We raise our target price (TP) for STB by 11.1% to VND38,100/share and maintain our BUY rating.
- Our higher TP is mainly derived from (1) a 9.1% aggregate increase in our forecast for 2023-2027F NPAT (-18.5%/-6.6%/19.1%/31.5%/6.9% for 2023/24/25/26/27F, respectively), (2) decreasing our assumption for STB’s cost of equity from 15.6% to 15.3% due to an updated beta, and (3) the positive impact of rolling our TP horizon forward to mid-2024. Meanwhile, we cut our assumption for STB’s target P/B from 1.20x to 1.10x.
- We decrease our 2023F NPAT by 18.5% to VND8.3tn (+64.4% YoY) mainly due to (1) a 41.6% increase in provision expenses as we assume STB will fully book provision expenses for the remaining VAMC balance and (2) a 6.0% decrease in NFI (including FX trading) following our lower assumption for banca sales. STB targets PBT growth of 50% YoY in 2023.
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