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MBB_Company Update_Quality at reasonable valuation

25/03/2021 - 11:15



TP upside       +24%
Close 24 Mar 2021
Price                        VND 27,600
12M Target            VND 34,233
Previous Target    VND 25,900
% Change             +32%

What’s new?

Our view

Quality at reasonable valuation

Increased loan growth assumption. We raise our 2021E loan growth forecast for MBB by 2.4ppt to 15.6% YoY versus our previous forecast of 13.2% YoY.

NIM forecast slightly decreased by 2bps to 4.92% for 2021E (+11bps YoY) after adjusting the loan mix and increasing the denominator.

Operating expenses cut by 4% vs our previous forecast for 2021E.

2021E provisioning forecast cut by 12% to VND5.8 tn (-5% YoY).

Net-net, we raise our PATMI forecasts 7% for 2021E and 4% for 2022E, implying PATMI growth of 33% YoY in 2021E and 21% in 2022E.

Yuanta versus the consensus. Our PATMI forecasts are now above the consensus mean by 6% for 2021E and 8% for 2022E.

MBB’s high LLR ratio gives it more flexibility than most banks have to reduce provisioning and boost future earnings.

Reiterate BUY. MBB trades at 1.3x 2021E P/B versus the sector median of 1.5x.

We raise our target price to VND34,233 (US$1.59), implying 1.6x 2021E P/BV based on our higher earnings forecasts and reduced discount rate.

MBB is a high-quality bank with strong operational results that we believe deserves a valuation premium over its peers. We expect MBB’s 2021E ROE to reach 20% compared to the sector median of 19%. Our new price target of VND34,233 implies 12-month TSR of 26%, and we maintain our BUY rating.

For the complete report, please access here: MBB_Company Update_Mar 2021

Analyst: Tanh Trantanh.tran@yuanta.com.vn

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