• We decrease our target price (TP) by 19.9% to VND23,000/share but maintain our BUY rating for HDB. Our lower TP is mainly due to (1) a downward revision in our target P/B from 1.55x to 1.20x, (2) an increase in our cost of equity from 13.0% to 14.6% and (3) a 9.6% aggregate decrease in our projected 2022-2026F NPAT-MI that outweigh the positive impact of rolling our TP horizon forward to end-2023F.
• We increase our 2022F net profit by 1.4% to VND7.9tn (USD319mn; +30.9% YoY) vs our previous forecast due to (1) a 0.2% decrease in our NII assumption, 2) a 6.2% decrease in NOII and (2) a 0.7% increase in our provision charge assumption.
• Our 2023F target P/B of 1.20x represents a 7.7% discount to our median peer target P/B multiple of 1.30x as HDB parent bank’s current NIM is the lowest in our coverage outside of SOE banks.
• Downside risks: Lower-than-expected NFI performance; supporting a distressed credit institution (DCI) hindering the bank’s growth.

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