{"id":16202,"date":"2019-01-22T08:43:44","date_gmt":"2019-01-22T01:43:44","guid":{"rendered":"https:\/\/yuanta.com.vn\/?post_type=phan-tich&#038;p=16202"},"modified":"2019-04-25T11:29:52","modified_gmt":"2019-04-25T04:29:52","slug":"stb_4q-results-beat-as-npl-restructuring-continues","status":"publish","type":"phan-tich","link":"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/stb_4q-results-beat-as-npl-restructuring-continues","title":{"rendered":"STB_4Q results beat as NPL restructuring continues"},"content":{"rendered":"<p><strong>BUY<\/strong><\/p>\n<p>Current price (01-21-19): VND 11,700<\/p>\n<p><strong>Target price:<\/strong> <strong>VND 14,049<\/strong><\/p>\n<p><strong>Upside: \u00a020.1%<\/strong><\/p>\n<p><strong>Non-interest income<\/strong> <strong>was the key driver<\/strong> <strong>of the 4Q18A earnings beat<\/strong>. The details are unclear but we believe that the 582% QoQ and 317% YoY boost in \u201cother income\u201d was driven by NPL collateral sales (i.e., positive NPL handling). The Company reported VND1,608 bn in total 4Q18 non-interest income, up 83.7% QoQ and up 5.4% YoY.<\/p>\n<p><strong>Pre-provisioning operating profits increased <\/strong>37% QoQ and 27% YoY, with PPOP ROA coming in at an annualized 1.33%, up 35bps QoQ and 17bps YoY. We view the PPOP improvement positively and see it as a better indicator of underlying operations than net profit for a bank that is in a restructuring period.<\/p>\n<p><strong>Asset quality improved, but risks remain. <\/strong>STB\u2019s NPL ratio decreased to 2.11% at 4Q18 vs 4.67% at 4Q17. Category 3-5 NPLs declined by 47.8% YoY, of which Cat. 3 declined 86.9% YoY, Cat. 4 fell 50.3% yoY, and Cat. 5 fell 40.7% YoY. However, the bank\u2019s overall credit risk remains high, with Category 5 NPLs accounting for 91% of total NPLs. Accrued interest assets (mostly NPLs) were down -6.4% YoY, while VAMC bonds (also NPLs) fell 11% YoY and 1.9% QoQ, to reach VND40,233 bn.<\/p>\n<p><strong>We reiterate our BUY rating<\/strong> as outlined in last week\u2019s <a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/stb_a-turnaround-story-for-the-long-haul\">initiation<\/a> report \u201cA turnaround story for the long haul\u201d. We believe that the 4% DoD gain on Jan 21 indicates that the market was pleasantly surprised by the 4Q18 results, and we think that a re-rating could result from the ongoing NPL restructuring and improving underlying operations as evidenced by the uptick in pre-provisioning operating profit. In our view, investors who wait until the restructuring is complete will miss the share price upside.<\/p>\n<p>For the complete report, please see the link:\u00a0<a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/wp-content\/uploads\/2019\/01\/STB_4Q18-results-beat-as-NPL-restructuring-continues.pdf\">STB_4Q18 results beat as NPL restructuring continues<\/a><\/p>\n<p><strong>Analyst: Tanh Tran,<\/strong>\u00a0<em>tanh.tran@yuanta.com.vn<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>BUY Current price (01-21-19): VND 11,700 Target price: VND 14,049 Upside: \u00a020.1% Non-interest income was the key driver of the 4Q18A earnings beat. The details are unclear but we believe that the 582% QoQ and 317% YoY boost in \u201cother income\u201d was driven by NPL collateral sales (i.e., positive NPL handling). The Company reported VND1,608&#8230;<\/p>\n","protected":false},"author":10,"featured_media":0,"template":"","class_list":["post-16202","phan-tich","type-phan-tich","status-publish","hentry","analysis-category-company-update","analysis-category-financials"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.3 (Yoast SEO v23.4) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>STB_4Q results beat as NPL restructuring continues | Yuanta Vietnam<\/title>\n<meta name=\"description\" content=\"BUY Current price (01-21-19): VND 11,700 Target price: VND 14,049 Upside: \u00a020.1% Non-interest income was the key driver of the 4Q18A earnings beat. 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