We cut our target price (TP) for VJC by 10% to VND103,000/share but maintain our MARKET PERFORM rating.

We believe VJC will benefit from the post-COVID recovery of the aviation industry. However, we have a conservative view on the volume and yield of the passenger transportation segment due to the high jet fuel price environment; thus, we project that VJC’s transportation NPAT margin will not return to its 2019 level until 2025. As a result, we believe that VJC’s current valuation looks fair.

Our lower TP is mainly driven by an 8% decrease in our 2023-2027F aggregate EBITDAR forecast that is primarily underpinned by (1) our lower assumptions for VJC’s domestic passenger volume and yield during the period, and (2) our lower profitability projection for the transportation segment in 2023-2024F due to our higher jet fuel spread assumptions.