- We cut our target price (TP) by 1.5% to VND33,400/share and reiterate our OUTPERFORM rating as we expect robust growth of e-commerce to lead VTP’s delivery service to have a top-line 17% CAGR in 2023-2025F. Meanwhile, we expect slower NPAT-MI growth at a 14% CAGR due to intensifying competition during the same period.      

- Our lower TP is mainly due to our 7.7% cut in aggregate 2023-2025F NPAT-MI that is driven by (1) our 26% lower aggregate 2023-2025F trading revenue assumption and (2) 2.8% higher aggregate 2023-2025F administrative expenses mainly as a result of higher-than-expected labor costs, which are partly offset by the positive effect of rolling our TP horizon forward to mid-2024.

- For 2023F, we project sales revenue of VND19tn (USD791bn; -14% YoY) and NPAT-MI of VND365bn (USD16mn; +42% YoY). We expect revenue in the year will be dragged by a 37% YoY decrease in trading revenue while earnings recover from low base and are bolstered by more efficient cost control.

- Downside risks: Prolonged price war in the express delivery industry; ineffective investments in new businesses; significant negative impact from economic slowdown weighing on consumption.

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