- We raise our target price (TP) for VCB by 12% to VND108,300/share but downgrade our rating from BUY to OUTPERFORM as the bank’s share price has increased 19% in the last three months.

- Our higher TP results from a 17.4% increase in our projection for aggregate 2023-2027F NPAT-MI that is partly offset by an increase in our cost of equity assumption for VCB from 13.1% to 13.4% due to an updated beta. 

- We increase our 2023F NPAT-MI forecast by 28.5% to VND36.0tn (+20.6% YoY) primarily due to (1) a 12.3% increase in our projection for NII that is derived from a 16-bp upward revision in NIM as we assume a smaller size support packages offered by VCB to assist the economy and (2) a 23.5% decrease in our provision expenses projection following our assumption for the reversal of provision expenses for interbank loans booked in Q4 2022.

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