We raise our target price (TP) for VCB by 7.7% to VND116,600/share and upgrade our rating from OUTPERFORM to BUY.

Our higher TP is due to the positive impact of rolling our TP horizon forward to mid-2024, which is partly offset by decreasing our assumption for VCB’s target P/B from 3.25x to 3.0x. Meanwhile, we keep our forecast for 2023F-2027F aggregate NPAT-MI relatively unchanged (-0.4% vs our previous Update Report), with respective changes of 0.6%/4.5%/-3.9%/-0.8%/-0.5% in 2023/24/25/26/27F.

We roughly maintain our 2023F NPAT-MI at VND36.3tn (+21.3% YoY) as a 5.9% increase in our projection for provision expenses is counteracted by 0.5% and 1.7% increases in NII and NFI (including gains from FX trading), respectively.