Company update – EIB (downgrade from Outperform to Hold)

Vietnam Export Import Commercial Joint Stock BankDowngrade from OUTPERFORM to HOLD (EIB : HSX – Bank)

 

  • Eximbank (EIB; downgrade to Hold from Outperform) reported 9M consolidated results showing a PBT of VND 1,136 billion (+148.69% y/y) completing 71% of the full year target.

 

  • Eximbank is still struggling to achieve any loan growth and it actually fell by 2.71% YTD. Meanwhile customer deposit growth was also slight at just 1.38 % YTD.

 

  • However, NIM improved by 10 bps thus helping total NII grow by 16.88% y/y. Then non-NII surged by 74.04% y/y thanks to one off income from the STB stake divestment.

 

  • YTD numbers suggest that EIB is making only slow progress in terms of restructuring. The main issue is a still shrinking loan book although at least the quality of loans has improved leading to higher NIMs.

 

  • For FY2018F, HSC now forecasts 33.33% y/y growth in PBT to VND 1,357 billion vs. VND 1,620 billion previously.

 

  • For FY2019F, HSC forecasts 20.64% y/y growth in PBT to VND 1,637 billion.

 

  • Downgrade from OUTPERFORM to HOLD with the new fair value price of VND 14,700 for a FY2018F P/B of 1.2xs from the previous fair value of VND 18,000 per stock (FY2018F P/B of 1.5xs).

 

 

 

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