Investment thesis:
Catalysts:

– Retail banking and strong demand from customers oper-ating in the real estate, energy segments support the bank’s growth.
– Insurance cooperation income is expected to grow by 90%yoy in 2021 that is the momentum for fee income growth of the bank.
– TPB is the pioneer in the sector regarding digitalization by launching the “Livebank” model which is expected to enhance the bank’s position in the segment as well as its customer base.
– Improving profitability: NIM reached 4.2% by the end of 2020.
– The plan to boost the consumer finance through the ac-quisition of a consumer finance company is expected to spur the bank’s growth and NIM.
– TPB has just been selected in the VN30 index (effective from February 1, 2021), increasing the attractiveness of the bank stock to institutional investors and and passive investment cash flow through index funds.

Risks:

– Even accounting for a small proportion in the credit structure, consumer loans negatively affect the bank’s as-set quality. Additionally, there a risk of interest rate change that affects the deposit cost and NIM.

Recommendation:

IVS recommends “BUY” for TPB shares at a target price of 34,500VND/share, equivalent to upside 26.1% compared to the price of VND27,350/share on Feb 25, 2021; P/E forward at the end of 2021 at 7.67x. TPB is currently trading at P/E that is 26% lower than peers.