CTG [BUY +45.8%] - Increasing NIM forecasts on strong pivot to retail lending

- We cut our target price (TP) for CTG by 2.4% to VND40,600/share but maintain a BUY rating.

- Our lower TP is mainly driven by (1) increasing in our in-house cost of equity from 12.5% to 13.0% and (2) decreasing our target P/B for CTG from 1.50x to 1.45x, which are partly offset by the positive effect of a 3.1% increase on our projection for aggregate 2022-2026F NPAT-MI.

- We cut our 2022F NPAT-MI by 2.0% to VND20.2tn (USD865mn; +43.6% YoY) relative to our previous Update Report mainly due to a 14.0% increase in our 2022F provision expenses, which is partly offset by a 2.5% increase in our projection for net interest income (NII) following a 4-bp increase in NIM and 2.2% increase in interest-earning assets (IEAs).