We increase our target price (TP) by 0.6% to VND35,900/share and maintain our BUY rating for HDB. Our higher TP is mainly due to (1) a 13.0% aggregate increase in our projection for 2022-2026F NPAT-MI, which is partly offset by (2) a downward revision to our target P/B from 1.60x to 1.55x and (3) an increase in our house cost of equity from 12.5% to 13.0%.

We increase our 2022F PBT by 8.8% to VND10.8tn (USD464mn; +34.4% YoY) vs our previous forecast due to (1) a 4.9% increase in our NII assumption and (2) 15.3% increase in NOII, which outweigh (2) a 7.7% increase in our provision charge assumption.

Our mid-2023F target P/B of 1.55x is a 6.1% discount to our peer target P/B median of 1.70x as although we model for a NIM improvement at the parent bank, its current NIM is the lowest outside of STB. Our TP implies a 2022F P/B at 1.66x.