HVN [MARKETPERFORM +3.1%] - China’s reopening to lead HVN’s post-pandemic recovery

- We cut our target price (TP) for HVN by 12% to VND13,400/share but maintain our MARKET PERFORM rating. Our lower TP is mainly driven by a 12% decrease in our 2023-2024F aggregate EBITDAR forecast that is primarily underpinned by (1) our lower assumptions for HVN’s domestic passenger volume and yield during the period and (2) our lower profitability projection for standalone VNA in 2023-2024F due to our higher jet fuel spread assumptions.

- In this Update Report, we maintain a 15% discount to HVN’s valuation in order to reflect the rising risk of the airline being delisted from HOSE.

- In 2023F and 2024F, we forecast that HVN will continue to incur losses of VND8.0tn (USD342mn) and VND4.4tn (USD190mn), respectively, as we conservatively expect international transportation to exhibit a gradual recovery amid high fuel prices while the airline has high operating leverage.