- We increase our target price (TP) for STB by 32.7% to VND73,500/share but downgrade our rating to MARKET PERFORM from OUTPERFORM as STB’s share price has rallied by 27% YTD.
- While we expect 2026F earnings growth to be modest given the bank’s focus on resolving its NPLs, we remain constructive on the long-term fundamental outlook of STB considering (1) the new Vice Chairman, Mr. Thuy, is expected to drive significant operational improvement and (2) ultimately the bank’s 32.5% stake sale will help boost its capital base meaningfully even though the exact timing is still uncertain.
- STB is trading at 2026-27F P/Bs of 2.1x/1.5x, above its peer medians of 1.3x/1.1x, respectively.
- Downside risks: Higher-than-expected NPL ratio; lower-than-expected NIM; further delay in the process of resolving the 32.5% stake pledged as collateral at VAMC.
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