- We maintain our BUY rating and increase our target price (TP) by 6.0% to VND77,600/share. Our higher TP is driven by (1) a 2.7% increase in our aggregate 2025-2029F earnings forecast (respective changes of -0.8%/+2.9%/+3.9%/+3.2%/+3.1% for 2025/26/27/28/29F) and (2) a higher target P/B assumption.
- The increase in our earnings forecast is primarily due to (1) a 0.7% increase in our aggregate 2025-2029F NII forecast due to slightly higher credit growth assumptions despite slightly more conservative NIM assumptions, and (2) a 9.1% increase in our aggregate 2025-2029F NOII following stronger-than-expected FX performance in H1 2025.
- We shift our assumption for a projected 543.1 million-share issuance through a private placement to occur at mid-2026 instead of end-2025 previously. Additionally, we maintain our assumption for the price of the private placement at VND66,900/share, implying expected total proceeds of VND36.3tn (USD1.4bn).
- VCB is currently trading at a trailing P/B of 2.53x, which is 1.5 standard deviations below its five-year historical average of 3.15x.
- Risks to our positive outlook: (1) Capital raising does not materialize as expected; (2) lower-than-expected credit growth; (3) lower-than-expected NIM.
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