VTP_BUY_TP 60,000_Upside 3.0_MARKET SHARE CONTINUES TO DECLINE _BSC_Vietnam company update

PRICING PERSPECTIVES

We do not make recommendations for VTP shares and estimate the fair value of this stock in 2023 at VND 60,000 per share based on the target P/E method = 13x, lower than the average P/E (2018-2021) = 21-29x due to concerns about (1) high competition of the delivery segment on the exchange, (2) Slow progress of logistics in the near future. We think that the target P/E = 13x is in line with (1) the overall growth rate of VsTP's courier segment = 10-15%/year, (2) VNINDEX P/E = 15-16x with average EPS growth = 20%/year

FORECASTING BUSINESS RESULTS

In 2022, BSC forecasts VTP to record DTT = 23,277 billion VND (+9% yoy), NPATMI = 427 billion VND (+44% yoy), equivalent to EPS FW 2022 = 4,126 VND, P/E FW 2022 = 13.9, P/B FWD 2022 = 3.6x. In 2023, BSC forecasts VTP to record DTT = VND 24,386 billion (+5% yoy), NPATMI = VND 472 billion (+10% yoy), equivalent to EPS FW 2023 = VND 4,556, P/E FW 2022 = 12.6, P/B FWD 2022 = 3.0, based on the following main assumptions:

1. Commercial segment: Revenue + 2% yoy, profit margin = 0.41% - equivalent to 2021. 2. Service segment - Delivery & Logistics:

• BSC forecasts that the courier industry will grow by +20-25% per year in 2022-2023.
• VTP's market share = 12.4% and 11.3% in 2022/2023 due to lower output growth than the industry average.
• Gross profit margin = 8.5% in 2022 based on both pricing prices: employee expenses + 13% yoy – based on assumption 1H.2022, NVL costs +31% yoy due to nvl prices increase, service costs purchased out +38% yoy + due to increased gasoline prices. Compared to 2021, the gross profit margin of the service segment is + 1 percentage point due to the low gross profit base in Q3-4.2021. By 2023, BSC assumes gross profit margin = 8.5%.

3. Assumed new investment value = VND 70 billion in 2022 – 23 based on the assumption of investment costs in 1H.2022. BSC has not included in the forecast of the logistics investment package 2022- 2025 = VND 3,500 billion because it is not sure of the disbursement plan.

VTP's gross profit margin is +0.7 points %/0.1 percentage points in 2022/2023 due to an increase in the proportion of the delivery segment with higher gross profit margin.

BUSINESS UPDATES

• In 1H.2022, revenue + 9% yoy: In which, delivery segment revenue + 36% yoy due to price +30% yoy, output +5-6% yoy,
• Gross margin decreased -0.3% yoy as gross margin of delivery segment decreased by 3.2% yoy, commercial segment +1% yoy.

CATALYST: (1) Hose exchange transfer, (2) Viettel divestment at VTP.