We raise our target price (TP) for TPB by 11.4% to VND31,300/share and maintain our BUY rating.

Our higher TP is mainly driven by a higher valuation produced by the residual income method that is derived from a 17.6% aggregate increase in our projection for 2023-2027F NPAT and outweighs an increase in TPB’s cost of equity from 14.6% to 14.7% due to an updated beta.

We increase our 2023F NPAT by 21.6% to VND6.5tn (USD275.9mn; +2.3% YoY) as a result of a 43.6% increase in our projection for 2023F NFI (including FX) that outweighs our 4.7% OPEX projection. The significant change in our 2023F NFI assumption is due to our expectation that new customer growth in Q4 2022 will lead to higher settlement service fees.