EIB_Is the golden age come back_BSC_Vietnam company visit note_EN_ICB8355

Valuation
At March 13, 2018, EIB was traded at VND 15,000 per share, equivalent to P/B of 1.32x, which is lower than the median P/B of listed banks (1.88x). We recommend to BUY EIB with the target price of VND 17.300 per share, equivalent to P/B of 1.5x. We had a meeting with EIB’s representatives and had the following notes: 
Business Plan:
In short term, EIB focuses on boosting asset growth, credit growth and NPL solution. In long term, the bank sets target of CAGR of loans of 20% annual, NIM of 2.8% and NPL ratio including debts sold to VAMC decreasing to 2.8% from 6.41% at present. 
Catalysts:
•    Writing off accumulate losses; EIB is permitted for margin trading.
•    Handling NPLs and other backlogs quickly.
•    Divesting STB records VND 500bn of EBT
•    Recovering in core business activities and credit growth.
Investment risks
•    Fail to meet the restructuring targets
•    Worsen in core business activities
Company update
•    Core business has recovered since the third quarter, 2017. Lending grew by 16.61% yoy, the strongest increase from 2014. PAT reached VND 823bn, the highest level from 2013. By the end of 2017, EIB officially wrote off accumulate loss.
•    EIB targets to make strong provision for the NPLs in 3 years starting from 2018. We estimate total bad debts of the bank is VND 8.7tn, equivalent to 62% of shareholders’ capital. The bank expects to record provision reversal in 2018.
•    Business plan