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Title TPB_TRACKING_TP 21,567VND_ Upside 2.5%_Update 2018 Business result_Vietnam Company Update
Report Type Phân tích công ty
Source BSC
Industry Financials
Bussiness LPB
Detail Date : 22/03/2019
Total pages : 6
Language : English
File Type : .PDF
FileSize : 876 Kb
Download: 194
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Short Content
Valuation
We recommend Tracking with TPB shares with a target price of VND 21,567/share, upside of 2.5% according to P/B valuation method = 1.55x. 
 
Forecast of business results 2019. 
In 2019, we forecast TPB will record TOI and PBT at VND 6,355 billion respectively (+ 12.9% yoy) and VND 2,649 billion (+ 17.3% yoy) assuming (1) credit growth in 2019 = 14%, (2) lending rate + 0.3% due to the shift to retail lending, mobilizing interest rate + 0.2%, (3) NPL = 1.04%, NPL coverage ratio = 100%, LDR = 65% . Currently, TPB shares are traded with P/E = 8x, P/B = 1.7x, higher than the current industry average P/B = 1.5x.
 
Investment Risk
Reduce credit growth to 14%.
 
Business update (Refer to page 2 for details) 
2018 business results. In 2018, TPB recorded TOI and PBT at VND 5,627 billion (+ 55.9% yoy) and VND 2,258 billion (+ 87.3% yoy). 
Net interest income increased sharply + 38% yoy, reaching VND 4,378 billion (accounting for 78% TOI). Credit growth in 2018 of TPB reached 19.06%. NIM in 2018 reached 3.99%, up 36 bps due to (1) focusing on retail lending with higher interest rates. In 2018, the lending interest rate reached 8.96% (up 167 bps), (2) increasing the long-term lending rate (higher interest rate) to 45.7%, However, we note that in 2019, the ratio of medium and long-term bank loans to 40% could affect the current lending structure of TPB.
Non-interest income increased sharply, reaching VND 1,249 billion (accounting for 22% of TOI), + 186% yoy due to (1) profit from service activities increased sharply, + 310% yoy due to insurance growth.
Operating expenses + 12.9% yoy, CIR reached 50.6%.
Bad debt + 24% yoy, in which group 2 debt increased to 2.06% (2017 = 1.74%). NPL = 1.04%, but if including VAMC, the NPL ratio = 1.5%. The rate of bad debt is 110%, according to our assessment, it is quite safe.