- 2022-11-03T00:00:00
- Strategy
Aggregate 9M 2022 NPAT-MI for our coverage universe grew 24% YoY and achieved 70% of our full-year 2022F aggregate forecast. Excluding stocks listed on HNX and UPCoM, aggregate 9M 2022 NPAT-MI for our HSX-listed coverage grew 17% YoY and achieved 68% of our full-year 2022F aggregate forecast. While these achievement ratios might ordinarily boost confidence that our earnings forecasts are on track, the recent policy rate hikes from the State Bank of Vietnam (SBV) — up 200 bps in the past two months — and VND depreciation vs the USD are larger than our previous expectations and increase potential downside risk to our forecasts. In addition to the direct negative impact of higher interest costs and FX losses for companies with unhedged USD debt, we believe the current ‘risk-off’ mood in Vietnam in the aftermath of the ‘VTP/SCB’ event (please see our Banking Thought Piece published October 18 for details) is likely to compound the negative impact of higher interest rates on the real estate market as well as demand for construction materials and other related services. Meanwhile, the magnitude of the policy rate hikes, which we believe will largely flow through to loan rates, suggests that some deterioration in banks’ asset quality is likely.
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