Earnings Report /
Vietnam

TCB: Ambitious technology-enabled growth

  • TCB's 2020 results beat our expectation by 2%.

  • 2021 projected PBT is revised up to VND18,870bn (US$820mn, +19%), lower than the proposed PBT in the annual plan.

  • We raise the target price to VND50,900/share and maintain our Buy recommendation.

Rong Viet
8 April 2021
Published byRong Viet

TCB's 2020 results beat our expectation by 2%. 2021 projected PBT is revised up to VND18,870bn (US$820mn, +19%), lower than the proposed PBT in the annual plan (VND19,800bn).

The company's 2021-2025 plan is ambitious. We revise our estimates to match the strategic plan, but our projected NFI to TOI ratio is not in line with the target. We raise the target price to VND50,900/share and maintain our Buy recommendation. This translates to an upside of 21% from the closing price of 7 April 2021.

TCB's 2020 results were better than expected and lead to some revisions for 2021. Actual PBT was VND15,800bn (US$687mn, +23%), higher than our projection (VND15,562bn, +21%). We raise our projection for credit growth in the 2021-2025 period, due to rapid expansion of loans and the confidence of the BOM in receiving top credit limit. We also revise upwards NII and net service income. 2021 PBT is expected at VND18,870bn (US$820mn, +19%).

We appreciate the ambitious strategic plan for the 2021-2025 period. We think that TCB will be able to scale-up strongly in the next five years, given its solid capital base (CAR) and high efficiency (ROE and NIM). The credit book will see robust growth with diversification in customer segments. The conservative leverage ratio is expected to be higher.

Sustainable ROE is likely to be improved, leading to re-rating, following higher valuation multiple. Combined with the advantages of the ecosystem, capital and NIM, we have a Buy recommendation with a target of VND50,900/share, 27% higher than our previous target. Compared to the closing price of 7 April 2021, this translates to an upside of 21%.