ACV [MARKET PERFORM -0.7%] - International traffic recovers, domestic traffic remains weak

- We downgrade our rating from OUTPERFORM to MARKET PERFORM despite keeping our target price nearly unchanged as ACV’s share price rallied 16% during the last three months. We trim our core NPAT forecast (excluding FX gains/losses) for 2024F by 2% and nudge up 2025F and 2026F by 1% and 3%, respectively.

- We reiterate our forecast for aggregate bad debt provisions of VND5.4tn for 2023-2025F, which is equivalent to 15% of the aggregate EBIT during the period. We expect ACV to recover most of these receivables during 2026-2028.

- We maintain our forecast of 40/46 million international passengers in 2024/2025, respectively, vs 42 million in 2019 before the COVID-19 pandemic.