- We maintain our target price (TP) for STB at VND38,100/share but downgrade our rating from BUY to OUTPERFORM as the stock’s price has increased by ~20% in the past three months. 

- The negative impact on our valuation from a 3.0% aggregate decrease in our 2023-2027F NPAT-MI projections (respective changes of +2.4%/-8.1%/-1.6%/-4.5%/-1.1% in 2023/24/25/26/27F) is offset by our lower assumption for STB’s cost of equity due to an updated beta. We maintain our target P/B for STB at 1.1x.

- Our lower 2023-2027F NPAT-MI forecast is due to a 10.6% aggregate decrease in pure NFI and 5.5% aggregate increase in provision expenses that outweigh a 2.2% aggregate raise in NII.

- We raise our 2023F NPAT-MI by 2.4% to VND8.5tn (+68.4% YoY) due to a 22.2% cut in provision expenses as we expect STB’s remaining VAMC balance will be cleared more by settlement than provisioning. This is partly offset by (1) a 15.8% cut in NOII and (2) 4.3% increase in OPEX.

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