TPBank, the bank that has just completed the restructure term and set the initial price of VND 32,000 for a TPB share. Whether this price is too high comparing with the development potential of this bank?
On the afternoon of April 12, TPBank held a road show to introduce TPBank investment opportunities. As planned, 555 million TPBank shares with TPB code will be officially listed on HOSE on April 19 with the initial price of VND 32,000 per share.
At the initial price of VND 32,000 per share, TPBank’s market capitalisation is estimated at VND 17.76 trillion and became the 8th largest market capitalisation on HOSE, HNX and UpCom.
At the above price, estimated P/ E and P/ B of TPBank are 19.4xs and 2.8xs respectively, 22.83 times and 3.08 times lower than the average of bank shares with chartered capital of VND 5 -10 trillion.
In the 1st quarter of 2011, Nguyen Hung, TPBank general director, said that pre-tax profit of the bank was over VND 513 billion dong, up nearly 2.5 times compared to the same period last year. The total mobilisation was over VND 110 trillion, the bad debt ratio was controlled at a low level of 0.95%.
According to Nguyen Hung, TPBank’s profit comes from its core business. Service revenue growth is very good compared to the previous year, especially bancassurance.
TPBank CEO said that with the business results in the 1st quarter of 2018, TPBank confidently surpassed the pre-tax profit target of VND 2.2 trillion.
Hung added that consumer credit is a business line that many banks were stimulating and TPBank would not ignore this. As such, TPBank planned to expand its branches, especially to the Southern market, where consumption is high.
“The trend is to mobilise the North, lending to the South. With the high growth rate of consumption, the South is our target area to exploit in the future”, said Nguyen Hung.
In addition, the bank’s digital banking is a great strength because of being cost-saving. TPBank is also the 1st bank to launch live banking, which can cover 80 percent of bank transactions, saving 70 percent of the cost. Therefore, the customer service charges are lower, creating good competitiveness in the market.
Sharing on the eve of the road show about the choosing of listing price of VND 32,000/share for TPB shares, Nguyen Hung said: “We have calculated thoroughly based on the future profitability of the bank. This price is well calculated by HOSE and only upon they acceptance, we can offer it”.
In addition, we also have some listing consultants who offer TPB’s TPBank price of around VND 36,000. And for the purpose of making the trading session smoothly, I think it is a reasonable price for TPB shares, also for the purpose of creating more price increase buffer after listing.”
According to Nguyen Hong Nam, SSI representative, it is necessary to rely on bank size, revenue plan, profit and growth of the bank to evaluate the stock.
Nam commented, “On the stock market, the initial price of VND 32,000/share of TPB shares compared to listed banks is a reasonable if the market goes smoothly. However, the market fluctuates up and down quite sensitive, thus investors should determine their risk tolerance.
Commenting on the potential of banking stocks, SSI’s representative said that banking stocks have good growth from the second half of 2017. If seeing 1 or 2 years ago, no one would think the bank stocks would have such spectacular growth.
However, the rise of the economy, the ice-melting in the real estate market has helped banks to solve the problem of bad debt and thank to this, their business have become good.
In terms of business, banking stocks are the fastest growing group by market capitalisation, so it is difficult to grow profitability from 10 to 20%.
Every year, banks’ listing stocks have made plans with the profit growth rate of 70-80%, a very high level. Stocks with high growth rate in the long run often attract a lot of institutional investors.
