Download MBB Update- HOLD

MBB Update- HOLD
May 31, 2017
ACBS Research Department
Tel: (+84) (8) 3823 4159 (ext: 303)
www.acbs.com.vn
Bloomberg: ACBS <GO>
1
MBB Update- HOLD
31-May-17
Ms. Uyen Nguyen
MILITARY COMMERCIAL JOINT STOCK BANK
(MBB VN)
(+84 8) 3823 4159 - Ext: 303
[email protected]
Company Update
Recommendation
HOLD
MBB announced decent business results for 1Q2017. Specifically, MBB’s net interest
income hit VND 2,407bn, up 36% YoY, whilst non-interest income was VND 495bn, up
80% YoY. With this, total operating income was VND 2,902bn, up 42% YoY. On the back
of those results, total operating expenses rose 31.3% YoY, though CIR decreased from
45.1% in 1Q2016 to 41.7% in 1Q2017, pushing profit before provision expenses up by
50.8% YoY as a result. On the other hand, provision expenses increased sharply, reaching
VND 579bn, up 1.5 times when compared to the year prior, and as a consequence MBB
recorded VND 1,112bn in EBT, up 26% YoY and exceeding the 25% plan for 2017.
HSX: MBB
Banking
20,400
Target price (VND)
Current price (VND)
Expected share price return
19,000
+7.4%
Expected dividend yield
Expected total return
+3.2%
+10.6%
In 1Q2017, MBB’s credit growth was 0.43%, in which outstanding loans to customers
reached VND 151,381bn while fund mobilization growth was negative 6.4% YTD
(customers’ deposit reached VND 182,410bn). NIM improved from 3.58% in 2016 to
3.71% thanks to the extra weight from loans to individuals (29.89% at the end of 2016 to
31.55% at the end of 1Q2017). Total assets hit VND 250,066bn, down 2.4% YTD.
Stock performance (%)
YTD
Absolute
Relative
41.4
29.0
1M
3M
20.3
17.0
12M
35.7
31.2
33.3
9.0
Source: Bloomberg
Price-Volume
'000
shares
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
20
15
10
5
0
05/16
09/16
01/17
05/17
Ownership
Viettel
15.79%
SCIC
Vietnam Helicopter Corp.
10.53%
8.39%
SaiGon Newport
Vietcombank
8.05%
6.95%
Stock Statistics
31-5-17
Bloomberg code
MBB VN
52-week range (VND)
Shares O/S (m)
Mkt cap (VND bn)
Mkt cap (USD m)
Foreign room left (%)
Est. free float (m)
3m avg daily vol (shrs)
VND/USD
Index: VNIndex / HNX
13,100 - 19,700
1,713
32,542
1,435
0.0
49.8
1,560,254
Thousands
25
VND
'000
MBB's non-performing loans as of the end of 1Q2017 were VND2,020 billion,
representing 1.33% of total outstanding loans, up slightly from 1.32% at the beginning of
the year. However, Tier 4 & 5 debts increased sharply (up 53% and 39% YTD respectively)
hence provision expenses increased sharply when compared to the year prior.
For 2017, MBB plans to increase its chartered capital by VND1,028 bn, to VND18,155 bn,
through the issuance of 85.6 million shares (2016 2nd dividend payment of 5%) and 17
million ESOP shares with an offer price of 10,000 VND / share.
For 2017, we are projecting 18% credit growth and 10% fund mobilization growth. NIM
could improve slightly from 3.58% in 2016 to 3.6% in 2017. We forecast 2017 EBT at
VND4,647 bn, ROE of 14%, ROA of 1.4%, EPS of VND 2,087, and a book value of
VND15,520. Using the Residual Income and Price-To-Book ratio methods, we value MBB
shares at VND20,400, and change our recommendation to HOLD.
Net Interest Income (VNDbn)
Growth (%)
Provision expenses ( VNDbn )
Growth (%)
Net Profit ( VNDbn )
Growth (%)
EPS (bonus-adjusted, VND)
Growth (%)
NIM(%)
NPL (%)
ROE (%)
PER (times)
PBR (times)
Dividend yield (%)
2015
7,319
4%
2,102
4%
2,528
2%
1,658
-13%
3.72%
1.61%
12.91%
11.5
1.35
2.6%
2016
7,979
9%
2,030
-3%
2,855
13%
1,642
-1%
3.58%
1.32%
11.91%
11.6
1.28
3.2%
2017F
9,149
15%
1,653
-19%
3,681
29%
2,087
27%
3.60%
1.33%
13.75%
9.1
1.22
3.2%
2018F
10,465
14%
1,671
1%
4,296
17%
2,424
16%
3.65%
1.33%
14.43%
7.8
1.15
3.2%
2019F
11,919
14%
1,850
11%
4,939
15%
2,787
15%
3.65%
1.33%
14.84%
6.8
1.08
3.2%
22,680
739.15/94.27
ACBS Research Department
Tel: (+84) (8) 3823 4159 (ext: 303)
www.acbs.com.vn
Bloomberg: ACBS <GO>
2
MBB Update- HOLD
31-May-17
MBB FINANCIALS MODEL
(VND bn except where stated)
Price (VND):
19,000 Target (VND):
20,400
Mkt cap
(VND bn):
32,542
2015
2016
2017F
2018F
2019F
7,319
7,979
9,149
10,465
11,919
Net fee & commission income
544
683
774
879
997
Net gain from trading foreign currencies
159
113
119
125
131
Net gain from trading of trading securities
134
101
141
154
169
Net other income
525
877
618
544
651
92
102
59
65
72
Total operating income
8,772
9,855
10,861
12,231
13,938
Operating expenses
3,449
4,175
4,562
5,137
5,854
39%
42%
42%
42%
42%
Profit before provision for credit losses
5,323
5,681
6,299
7,094
8,084
Provision for credit losses
2,102
2,030
1,653
1,671
1,850
Profit before tax
3,221
3,651
4,647
5,423
6,234
Profit after tax
2,512
2,884
3,717
4,338
4,987
Net profit
2,528
2,855
3,681
4,296
4,939
EPS (VND) - unadjusted
1,832
1,724
2,087
2,308
2,527
0.90
0.95
1.00
1.05
1.10
Adjusted EPS (VND)
1,658
1,642
2,087
2,424
2,787
EPS growth (%)
-13%
-1%
27%
16%
15%
Net interest income
Income from investment in other entities
Cost to income ration (CIR) (%)
Bonus factor (x)
KEY CASHFLOW AND BS ITEMS
2015
2016
2017F
2018F
2019F
121,349
150,738
177,870
209,887
247,667
21%
24%
18%
18%
18%
181,565
194,812
214,294
246,438
283,403
8%
7%
10%
15%
15%
Chartered capital
16,000
17,127
18,155
19,063
20,016
Shareholders' equity
22,593
25,352
28,177
31,383
35,178
BVPS (VND)
14,121
14,802
15,520
16,463
17,575
Total assets
221,042
256,259
286,650
325,420
371,037
2015
2016
2017F
2018F
2019F
NIM(%)
3.72%
3.58%
3.60%
3.65%
3.65%
NPL (%)
1.61%
1.32%
1.33%
1.33%
1.33%
ROE (%)
12.91%
11.91%
13.75%
14.43%
14.84%
ROA (%)
1.20%
1.20%
1.36%
1.40%
1.42%
PER (x)
11.5
11.6
9.1
7.8
6.8
PBR (x)
1.35
1.28
1.22
1.15
1.08
2.6%
3.2%
3.2%
3.2%
3.2%
Loans outstanding
Loans growth (%)
Customer deposits
Deposit growth (%)
KEY RETURN AND VALUATION
RATIOS
Dividend yield (%)
ACBS Research Department
Tel: (+84) (8) 3823 4159 (ext: 303)
www.acbs.com.vn
Bloomberg: ACBS <GO>
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MBB Update- HOLD
31-May-17
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Fax: (+84 4)3942 9407
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Hung Phan
(+84 8) 3823 4159 (x354)
[email protected]
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Chi Luong
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Logistics, Agri, Power
Yen Tran
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Cuong Nguyen
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Director - Head of Institutional Client
Tyler Cheung
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Hanh Huynh
(+84 8) 5404 6632
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Hang Nguyen
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ACBS Research Department
Tel: (+84) (8) 3823 4159 (ext: 303)
www.acbs.com.vn
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MBB Update- HOLD
31-May-17
DISCLAIMER
Our Recommendation System
BUY: where we believe prospective 12 month VND total return (including dividends) will be 15% or more.
HOLD: where we believe it will be -15% to 15%.
SELL: where we believe it will be lower than -15%.
Analyst Certification(s)
We, the author(s) of this report, hereby certify (1) that the views expressed in this research report accurately reflect our personal views about any
or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is, or will be directly or
indirectly related to the specific recommendations or views expressed in this research report.
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