• We cut our target price (TP) for ACB by 16.7% to VND33,000/share but maintain our BUY rating.
• Our lower TP is mainly driven by (1) a 8.5% decrease in our projection for aggregate 2022-2026F NPAT and (2) 1.45-ppt increase in our cost of equity from 13.0% to 14.5%, resulting in a lower valuation in our residual income approach and a cut in our target P/B from 1.85x to 1.40x.
• We lower our aggregate bottom-line forecast for 2022-2026F due to (1) a 2.5% aggregate decrease in NII following a cut in our assumption for average NIM from 4.26% to 4.20%, (2) a 14.8% aggregate decrease in NOII and (3) 19.6% aggregate increase in provision expenses due to a 200-bp increase in policy rates in H2 2022 as well as headwinds facing the real estate and corporate bond markets that could negatively affect the ability of customers to service loans.

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