ACB [BUY +63.4%] - Increasing NIM forecasts despite higher deposit rates

- We cut our target price (TP) for ACB by 5.9% to VND39,600/share but maintain our BUY rating.

- Our lower TP is mainly driven by a lower valuation produced by both the residual income and target P/B approaches that is derived from (1) a 3.3% aggregate decrease in our projection for 2022F-2026F NPAT and (2) an increase in our in-house cost of equity from 12.5% to 13.0%.

- However, we increase our 2022F NPAT by 4.8% to VND14.9tn (USD647.8mn; +54.9% YoY) vs our previous forecast as result of (1) a 51.0% decrease in our provision expense forecast from VND758bn to VND371bn due to a large reversal of provisions for restructured loans and (2) a 5.6% increase in our assumption for net fee and commission income (including FX) — with the main increase coming from bancassurance services.