Equity Analysis /
Vietnam

Military Commercial: 2022/2023 outlook: Credit growth and credit cost margin are solid growth factors

  • Provisions and CIR improvement have been growth determinants beside balance sheet expansion

  • 2022/2023 outlook: Soft-landing in provisioning policy as a solid driver

  • We raise our target price to VND42,800/share and maintain a Buy recommendation. This translates to an upside of 36%

Thanh Nguyen
Rong Viet
30 March 2022
Published by

The consumer finance segment of the group has expanded to make up c6% of the consolidated loan book. Despite the growing contribution of riskier segments, we expect operating costs control and easing credit cost margin to prevail to contribute significantly to earnings growth in the 2022-2023 period.

Notwithstanding the potential of exclusive quota granted, we conservatively factor in 26% consolidated credit growth in 2022. We have a 2022-2023 PBT forecasts at VND21.8tn (US$948mn, 32% yoy) and VND27.0tn (US$1.2bn, 24% yoy), respectively. TOI is projected to expand 21% in 2022 and 18% in 2023 despite robust NIM and NFI.

The forward 2022 book value per share is VND19,802, translating to a forward P/B of 1.6x. We anticipate tailwinds in H1 22 and see sustainable enhancement in credit cost margin and CIR in the next few years, which should lead to stably high ROE. Therefore, we raise our target price to VND42,800/share and maintain our Buy recommendation. This translates to an upside of 36% from the closing price of 28 March 2022.