We increase our target price (TP) for HDB by 6.5% to VND24,500/share and maintain our BUY rating. Our higher TP is mainly due to (1) a 6.0% aggregate increase in our projection for 2023-2027F NPAT-MI and (2) decreasing our cost of equity from 14.6% to 13.8%.

We increase our 2023F NPAT-MI by 46.1% to VND12.5tn (USD545mn; +46.1% YoY) vs our previous forecast due to (1) a 3.1% increase in our NII assumption and (2) 99.1% increase in NOII mainly due to assuming one-off income from signing an exclusive bancassurance partnership, which outweigh (3) a 10.1% increase in our OPEX assumption.

After TCB and VPB, HDB has the third highest CAR in our coverage (13.4%) as of 2022.