- We cut our target price (TP) for BSR by 4% to VND19,600/share and downgrade our rating from OUTPERFORM to MARKET PERFORM. Our lower TP is mainly due to our 4.3% lower aggregate 2024-2028F NPAT-MI forecast (-8.0%/-7.5%/0%/0%/0% in 2024/25/27/28F, respectively). The lower aggregate NPAT-MI is mainly because we remove our inventory provision write back assumption in 2024-2025F, which outweighs our higher jet A1 spread assumption in 2024F. 

- We forecast 2024F reported NPAT-MI to decrease 20% YoY to VND6.8tn due to (1) 15% YoY lower sales volume because of planned maintenance (50 days, March & April), and (2) YoY lower crack spreads following 2022’s high base. 

- We project a high gross refining margin (GRM) of USD8.1/bbl in 2024, due to the tight refining market. We expect the GRM to normalize to USD5.4/bbl in 2025-2027F. We believe this GRM will support sufficient cash flow over the next five years for an upgrade & expansion project (USD1.3bn) to increase its volume by 15% and BSR maintain its dominant market share in Vietnam.

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