BSR [BUY +21.2%] - Higher volumes but lower crack spreads

- We cut our target price for BSR by 6% to VND19,300/share but maintain our BUY rating. Our lower target price is due to our 6% lower projected aggregate 2023-2032F NPAT forecast (-16%/-14%/+31% for 2023/2024/2025F, respectively).

- Our decreased earnings forecast is mainly due to our projections for a lower diesel (DO) spread and a two-year delay of BSR’s upgrade & expansion project to 2028F. However, maintenance being delayed from 2023 to 2024 should support volume and earnings in 2023.

- We forecast 2023 NPAT to drop ~52% YoY to VND7.1tn (USD300mn) as we expect spreads to cool from their highs in 2022; however, this is still near the previous cyclical peak in 2017.