We maintain our BUY rating as we like VEA’s large exposure to Vietnam’s extensive motorbike (2W) market and the long-term growth of the country’s auto (4W) consumption along with robust dividend yields.

We increase our target price (TP) by 1% as we raise our aggregate 2022F-2024F NPAT-MI forecast by 8% mainly due to our forecast for 8% aggregate higher profit from VEA's associates in the period. This factor is partially offset by the impact of our increased in-house cost of equity assumption due to a 50-bp increase in our risk-free rate assumption.

We expect passenger car (PC) and 2W industry sales to recover from the severe disruptions from COVID-19 in 2020-2021 and achieve respective CAGRs of 24% and 10% in 2021-2024F.