Company Report

At VND 23,100 per share, CTG is trading at 2018 and 2019 PBRs of 1.3x and 1.2x respectively, which is lower than the industry 2019 PBR average of 1.5x. The lower than average valuation is reflected upon possible 2018 losses the bank may have to absorb. We expect Vietinbank will have to deal with additional NPLs in 2019, while credit growth is expected to be capped due to the inherent difficulty in raising Tier 1 capital. Taking into consideration all of the facts at hand, we recommend a stance of Underperform for the stock, with a 1Y target price of VND 23,000 per share, equivalent to a 2019 PBR of 1.2x.