We cut our target price (TP) for STB by 3.4% to VND37,100/share but maintain our BUY rating.

Our lower TP is mainly derived from increasing our house cost of equity from 12.5% to 13.0%, which is partly offset by a 1.2% aggregate increase in our forecast for 2022-2026F NPAT. In addition, we lower our target P/B for STB from 1.5x to 1.45x.

We increase our 2022F NPAT by 3.6% to VND5.0tn (+45.9% YoY) mainly thanks to (1) a 4.2% aggregate increase in pure NFI as we raise our projection for income from banca commissions, (2) an 18.2% increase in gains from FX trading and (3) increasing our forecast for net other income from VND725bn to VND2.7tn. These are partly offset by a 1.6% decrease in NII and 29.1% increase in provision expenses — the main increase focusing on VAMC provisioning.