- We increase our target price (TP) for VJC by 2% and upgrade our rating to OUTPERFORM from MARKET PERFORM as the airline gained traction in improving its core profitability in H1 2023. We also project that VJC’s transportation EBITDAR will return to the 2019 level in 2024.

- Our increased TP is mainly driven by our 7% higher aggregate 2023F-24F transportation EBITDAR forecast, which is partially offset by our 20% lower aggregate 2023F-36F earnings forecast that is mainly driven by our lower forecast for profits from aircraft transactions. We change our 2023F/24F/25F NPAT-MI forecasts by +8%/+17%/-39% vs our previous projections.

- We forecast 2023F revenue of VND59.7tn (USD2.5bn; +48.7% YoY) and NPAT-MI of VND986tn (USD42mn) vs a net loss of VND2.3tn (USD96mn) in 2022. We project VJC’s transportation segment to make net profits of VND740bn and VND1.6tn in 2023F and 2024F, respectively.

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