We maintain a MARKET PERFORM rating for ACV while raising our target price (TP) by 2.4% to VND94,000/share. Our higher TP is mainly driven by our increased GPM forecasts thanks to ACV’s efficient cost management and more positive forecasts for the domestic aviation market following a stronger-than-expected recovery in H1 2022, which are partially offset by our 0.5-ppt higher risk-free rate assumption.

While the recovery of international passenger (pax) numbers is broadly in line with our forecast, domestic passenger numbers have recovered faster than our previous expectation; we thus raise our domestic passenger number forecasts by 9% in aggregate for 2022-2025F — notably by 12% in 2022F. For 2022F, we forecast 82.8 million domestic passengers (111% of 2019’s result) and 11.2 million international passengers (~27% of 2019’s result). We expect international passenger numbers to experience a meaningful recover starting in H2 2022F.

Following our domestic passenger number and GPM assumption changes, we raise our aggregate NPAT-MI in 2022-2025F by 22%.