LPB [UNDERPERFORM -17.9%] - Structural improvements drive growth; valuation still rich

- We raise our target price (TP) for LPB by 57% to VND26,800/share and upgrade our rating from SELL to UNDEPERFORM.

- Our higher TP is driven by (1) the positive impact of rolling our TP horizon forward from end-2025 to mid-2026, (2) a 25.3% increase in our aggregate forecast for 2025-2029 NPAT-MI (with respective increases of 16.1%/16.5%/20%/30.3%/39.1% in 2025/26/27/28F/29F), (3) a decrease in our assumption for LPB’s cost of equity due to an updated beta, and (4) a higher target P/B assumption.

- We view LPB’s current valuation as expensive at a 2025F P/B of 2.32x. LPB is currently trading at a premium of 103% relative to our peer group median.

- Downside risks: (1) Lower-than-expected NIM and (2) higher NPLs.

- Upside potential: Higher-than-expected NOII.