MBB_AGM Takeaways

BUY

TP upside/(downside) +16%
Close 27 Apr 2021
Price                             VND 29,600
12M Target                 VND 34,230

Annual General Meeting Takeaways

MBB held its annual general meeting (AGM) on Apr 27.

Key Takeaways

MBB targets 2021E PBT of VND13.2 tn (+23% YoY). 1Q21 PBT reached VND4.6 tn, completing 35% of the bank’s full-year target and 32% of our estimate.

The bank targets credit growth at about 11.0% YoY in line with the SBV’s credit growth room for MBB (vs our forecast of 15.6%). The bank believes that it will achieve higher credit growth of about 15-17% subject to the SBV’s approval. In the first quarter, loan growth reached about 8.6%.

Raising capital. MBB plans to raise charter capital to VND38.7 tn from VND28.0 tn via stock dividend payment (VND9.8 tn), new shares issuance to strategic investor Viettel via private placement (VND0.7 tn), and ESOP (VND0.2 tn).

NPL ratio target is below 1.50% vs. our forecast of 1.00%. 1Q20 NPL was 1.29% (+20bps YTD).

Total restructured loans as at 1Q21 was VND2.0 tn (vs. VND9.0 at the beginning of 2020), or 0.6% of 1Q21 loans (3.0% of 4Q20 loans).

The bank targets to attract 3 to 5 million new customers this year. MBB reports 1 million new customers in the first quarter.

Our view

Our 2021E PBT forecast of VND14.3 tn (+34% YoY) as outlined in our most recent update in Mar 2021 is 8% higher than guidance. However, we believe that our profit target for MBB is achievable given the potential higher-than-guidance credit growth.

The impact of the Circular 03/2021/TT-NHNN is insignificant. Assuming that VND2.0 tn restructured loans as at 1Q21 falls into cat. 4 NPLs, then MBB needs to provide additional provisions of only VND237 bn (0.1% of 1Q21 total loans) over 3 years. Please see the table in the left margin column for details on different scenarios.

“King of CASA” is no longer MBB’s title. MBB’s CASA ratio was 36.9% as at 1Q21, which is lower than TCB’s 44.2%.

Reiterate BUY. The stock trades at 1.4x 2021E P/BV vs. the sector median of 1.6x. Our expected 2021E ROE for MBB of 20% is 2ppt higher than the consensus expectation of 18% ROE this year. Our fair value-based target price of VND34,230 implies 18% total shareholder return, and we maintain our BUY rating.

For the complete report, please access here: MBB_AGM Note_27.04.21

Analyst: Tanh Tran, tanh.tran@yuanta.com.vn