VJC [MARKET PERFORM -2.3%] - Slower recovery trajectory on lower projected profitability

- We cut our target price (TP) for VJC by 3% to VND104,100/share and downgrade our rating to MARKET PERFORM from OUTPERFORM.

- Our lower TP is mainly driven by a 5% decrease in our 2023-2025F aggregate EBITDAR forecast that is primarily driven by our 1.2% lower assumptions for VJC’s air transportation gross margin, on average during the period. The impact is partially offset by rolling our TP horizon to end-2024.

- For 2023F, we cut VJC’s revenue/NPAT-MI forecast by 3%/61% to VND58tn (USD2.4bn; +44% YoY)/VND364mn (USD15.4mn), respectively. We project that VJC’s transportation segment will make a net profit of VND213mn (USD9mn) in 2023F, equal to 6.8% of the bottom-line in 2019.