{"id":47501,"date":"2020-02-14T15:12:57","date_gmt":"2020-02-14T08:12:57","guid":{"rendered":"https:\/\/yuanta.com.vn\/?post_type=phan-tich&#038;p=47501"},"modified":"2020-02-14T15:12:57","modified_gmt":"2020-02-14T08:12:57","slug":"bid_downgrade-to-sell","status":"publish","type":"phan-tich","link":"https:\/\/yuanta-uat.ysvn.com.vn\/en\/analysis\/bid_downgrade-to-sell","title":{"rendered":"BID_Downgrade to SELL"},"content":{"rendered":"<p><span style=\"font-size: 18pt\"><strong>Downgrade to SELL<\/strong><\/span><\/p>\n<p style=\"text-align: justify\"><strong>TP upside (downside) -25%<\/strong><br \/>\nClose 14 Feb 2020<br \/>\nPrice\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 VND 50,000<br \/>\n12M Target\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 VND 37,300<br \/>\nPrevious Target \u00a0\u00a0 VND 38,700<br \/>\nChange\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0-4%<\/p>\n<p><span style=\"font-size: 14pt\"><strong>What\u2019s new?<\/strong><\/span><\/p>\n<ul style=\"list-style-type: square\">\n<li><strong>Loan growth forecast reduced to 14% <\/strong>for 2020E and 2021E vs. our previous 16% forecasts.<\/li>\n<li><strong>Lending rate to fall to support enterprises <\/strong>dealing with the effects of Covid-19.<\/li>\n<li><strong>We cut our EPS forecasts <\/strong>by 23% for 2020E and 21% for 2021E.<\/li>\n<\/ul>\n<p><strong><span style=\"font-size: 14pt\">Our view<\/span><\/strong><\/p>\n<ul style=\"list-style-type: square\">\n<li><strong>We downgrade BID to SELL<\/strong> from the previous HOLD-Outperform.<\/li>\n<li><strong>Near-term headwinds<\/strong> given the macro uncertainties created by the virus.<\/li>\n<li><strong>BID is overvalued<\/strong> at 2.4x 2020E P\/BV vs. the peer median 1.2x, especially given its 2020E adjusted ROE of just 11% vs. the sector median of 21%.<\/li>\n<\/ul>\n<p><strong><span style=\"font-size: 18pt\">Enough is enough<\/span><\/strong><\/p>\n<p><strong>Cutting our loan growth assumptions. <\/strong>The KEB-Hana investment has improved BID\u2019s balance sheet, which should support credit growth going forward. However, we cut our loan growth forecasts to 14% for each the next two years (vs our prior 16% YoY forecasts) in line with the SBV\u2019s target loan growth for the whole sector for this year.<\/p>\n<p><strong>The increased capital reduced the bank\u2019s asset\/equity leverage from 25x to 22x<\/strong>. It should also help reduce BID\u2019s long-term funding costs. We expect NIM to improve from 2.83% in 2019P to 2.96% (+13bps YoY) in 2020E and 3.02% (+6bps YoY) in 2021E.<\/p>\n<p><strong>However, our revised NIMs are lower than our previous forecast <\/strong><em>(see page 2)<\/em><strong> partly due to the effects of the Covid-19 outbreak. <\/strong>We expect that banks including BID will cut lending rates to support enterprises as they handle the impact of the disease on their businesses.<\/p>\n<p><strong>Therefore, we revise down our 2020E PBT forecast to VND13.1 tn,<\/strong> down -29% vs. the previous forecast but still up +21% YoY.<\/p>\n<p><strong>Overvalued\u2026Downgrade to SELL. <\/strong>We are still positive on the earnings prospects for 2020-21E, but the stock has returned 54% since our initiation in March 2019 (see <a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/wp-content\/uploads\/2019\/03\/BID_Initiation_Mar-2019-2.pdf\"><strong>Time to Make a BID<\/strong><\/a>). The valuations are stretched and in our view are not justified.<\/p>\n<p><strong>The current price multiple of 2.4x 2020E P\/BV is expensive<\/strong> vs our 2020E ROE forecast of 11%. This makes BID a Gordon Growth outlier relative to the sector median P\/BV of 1.2x and sector median ROE of 22%. Along with our earnings revisions, we cut our target price by 4% to VND 37,300 per share, implying a still-generous 2020E P\/BV of 1.8x. With 25% downside to our target price, we downgrade our recommendation to SELL from the previous HOLD-Outperform.<\/p>\n<p>For the complete report, please access here: <a href=\"http:\/\/yuanta-uat.ysvn.com.vn\/wp-content\/uploads\/2020\/02\/BID_Recommendation-Update_02.2020.pdf\">BID_Recommendation Update_02.2020<\/a><\/p>\n<p><strong>Analyst: Tanh Tran,\u00a0<\/strong> <em>tanh.tran@yuanta.com.vn<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Downgrade to SELL TP upside (downside) -25% Close 14 Feb 2020 Price\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 VND 50,000 12M Target\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 VND 37,300 Previous Target \u00a0\u00a0 VND 38,700 Change\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0-4% What\u2019s new? Loan growth forecast reduced&#8230;<\/p>\n","protected":false},"author":10,"featured_media":0,"template":"","class_list":["post-47501","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>BID_Downgrade to SELL | Yuanta Vietnam<\/title>\n<meta name=\"description\" content=\"Downgrade to SELL TP upside (downside) -25% Close 14 Feb 2020 Price\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 VND 50,000 12M Target\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 VND 37,300 Previous Target \u00a0\u00a0\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" 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