INVESTMENT THESIS

•Bank is heading to the booming period: 5-Y CAGR of credit and PBT is 22.5%/y and 98%/y, respectively. Credit was over 20%/y in the last 5 years. Notably, in the first haft of 2021, the bank recorded PBT of 3,100 VND bil, equal to 95% 2021 target thanks to its high credit growth, lower COF and non-current income from bancas upfront fee. 

•High and stable treasury income. The bank ranks No.1 in terms of government bond trading in 2020 and 1H2021 with the trading market share of 10.69%. 

•Expectation from non-current income given the bank’s plan to divest from FCCOM as well as upfront fee collection from exclusive bancas contract with Prudential. 

•Long-term momentum from SME and retail acceleration. 

•High liquidity funding while asset quality is in safety. 

RISKS

Bad impact of 4th Covid wave on 2nd haft credit growth and asset quality. Nevertheless, banks are still well supported by SBV given that they are considering the amendment of Cir.03/2021 relating relieving provision set up roadmap.

RECOMMMENDATION

MSB share is in good liquidity as it is selected to large index basket (VNFinlead and VNDiamond). MSB is trading at a reasonable P/B relative to the peers. P/B is at 1.78, slightly lower than the top JSCBs reflecting the bank’s position relative to them in terms of earnings as well as business advantages and prospects. 

We highly appreciate the bank’s business outlook that has been mostly reflected in the share price. Therefore, we recommend “Neutral” for MSB shares with a target price of 33,600VND/ share.