- We cut our TP for BSR by 46% to VND17,500/share but maintain our BUY rating. Our lower TP is due to our 1) 7% lower aggregate 2022-2026F NPAT forecast resulting from lower projected gasoline crack spreads and 2) increased equity risk premium and cost of debt. 

- 2023 NPAT to drop 50% YoY to VND7.4tn (close to the previous cyclical peak in 2017) as we expect spreads to cool from their highs in 2022, volume to decline due to periodic maintenance. 

- Although we expect BSR’s gross refining margin (GRM) to follow regional GRMs and normalize starting in 2023, our projection of BSR’s GRM being USD5-8/bbl over the next five years should support sufficient cashflow to execute the company’s planned expansion & project upgrades (to expand its capacity by 15%) and maintain its dominant market share in Vietnam.

Powered by Froala Editor