TCB [BUY +44.0%] - NIM faces downward pressure but valuation attractive

- We cut our target price (TP) for TCB by 2.1% to VND42,200/share but maintain our BUY rating.

- Our lower TP is mainly driven by a lower valuation produced by both the residual income and target P/B approaches that is derived from (1) a 7.6% aggregate decrease in our projection for 2023-2027F NPAT-MI and (2) our assumption for TCB’s target P/B declining from 1.3x to 1.2x. These factors are partly offset by the positive effect of rolling our TP horizon forward to mid-2024.

- We decrease our 2023F NPAT-MI by 8.1% to VND18.4tn (USD781mn; -8.5% YoY) due to (1) a 10.5% decrease in 2023F NII following a 50-bp cut in NIM and (2) 6.2% decrease in 2023F NFI, which are partly offset by a 5.4% cut in 2023F provision expenses.