HDB [OUTPERFORM + 10.9%] - Strong NII growth to outweigh pressure on credit costs

- We increase our target price (TP) by 4% to VND29,000/share, but downgrade our rating for HDB from BUY to OUTPERFORM as the share price has increased 17% in the last three months. Our higher TP is mainly due to a 4% increase in our aggregate 2024-2028F NPAT-MI (1%/-1%/2%/2%/6% for 2024/25/26/27/28F, respectively).

- We slightly increase 2024F NPAT-MI by 1% to VND12.4tn (USD498mn; +24% YoY) primarily due to (1) a 2% increase in NII with our higher NIM forecast and (2) a 14% decrease in provision expenses that outweigh (3) our 20% cut in NOII amid the weak performance in H1 2024.

- We forecast HDS’s 2024F PBT at VND1.3tn (+97% YoY) given H1 2024 PBT of VND601bn. The company targets 25% loan growth in 2024F with strong seasonal consumer lending in H2 2024.