ACB_harvesting fruits_BSC_Vietnam company visit note_EN_ICB8355

Valuation
We recommend BUY ACB at 12 month target price of VND 55,900/share, upside 19% by adjusted P/B method. We visited ACB and have following notes.
2018 forecast.
BSC forecasts that 2018’s EAT will be VND 4,343 billion (+105% yoy), EPS will be VND 4,354/share. 2018 equity will be VND 20,423 billion, book value will be VND 20,715/share.
Catalysts:
•    Other income or provisions reversal from solved NPLs recovery.
Risks
•    NIM decrease due to higher competition.
•    CIR inflates
Investment highlights (more details in page 2)
•    ACB completed provisioning G6 debts and VAMC bonds in 2017. Total provision expenses of VND 2,569 billion will not continue in 2018, and will boost EPS by VND 2,605/share.
•    Expected provision reversal from recovering NPLs debts (G6, VAMC, others). Total off balance sheet is VND 5,000 billion.
•    Operating profit before provision up by 81% to VND 5,222 billion, and expected to maintain high growth in 2018.
•    Asset quality is good, provision expenses are expected to down sharply since 2018.
•    Even with credit celling is set at 15% by SBV, ACB can attain higher growth due to strong financial position. ACB plan to boost services income by 20% annual, maintain NIM and decrease CIR to under 50%.