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Shares of Military Bank swung in intra-day trade in a range between VND13,800-VND14,500 before ending the day at VND13,800, unchanged from its initial price with first trading day limits of +/-20% on the HoChiMinh City Stock Exchange.
The Hanoi-based lender, with a charter capital of VND7.3 trillion, made a pre-tax profit of VND2.29 trillion in 2010, up 52% on year.
Given the State Bank of Vietnam’s tightening policy and the government’s Decree 11, MB targets to make VND2.915 trillion pretax profit in 2011, up 24% from 2010.
The lender also plans to achieve total assets of VND152 trillion (+ 32% year on year), total deposits of VND115 trillion (+20%), total outstanding loans of VND58 trillion (+14%) and a non-performing loan ratio of less than 1.9% in 2011.
The lender planned to raise its charter capital by 37% to VND10 trillion this year through: 1) issuing VND1 trillion worth of new shares to local strategic partner, Viettel. The deal will raise Viettel’s stake in the lender to 18.5%, and 2) issuing 170 million new shares to existing shareholders.
It also aimed to make a pre-tax profit of VND3.87 trillion on net interest income of VND5.6 trillion in 2012 and VND5.15 trillion on net interest income of VND7.3 trillion in 2013, the lender said in a filing posted on the HOSE’s website on October 24.
Relating to MBB’s share prices, Thang Long Securities (TLS), a subsidiary of MBB and the advisor of its listing, estimated MBB’s EPS in 2011 at VND2,660 and if taking the average P/E of the banking sector, MBB share price would be VND17,800/share. TLS also estimated MBB share price at VND15,800 based on P/B method.
Meanwhile, Maritime Bank estimated MBB’s EPS at VND2,804 in 2011, resulting in its estimated share price of VND20,245 and price under P/B method of VND14,627, price under discounted method of VND18,114-VND18,671.
“MB is among the banks with best profitability and efficient network in the industry. After cautions considerations, we value MBB at the price of VND 16,833 per share, 22% higher than the reference price on the listing day. Hence, we give a Buy recommendation on this stock” ACBS analyst wrote in a research report.
Quach Thuy Linh, an analyst with VCBS wrote in a prelist research report: “With the listing price of VND13,800, MBB’s P/E forward would range from 4.6x – 4.7x, which is much lower than the average 8.4x of the banking sector. Considering other strengths of MBB, we believe MBB is a good investment choice among listed banking stocks.”
Currently, MB has 5 major shareholders , VIetcombank, Viettel ,Maritime Bank, Vietnam Helicopter Corporation and Saigon Newport, which represent a total of 43% stake, StoxPlus data showed.
MBB had high free float volume of 382,000,000 shares after subtracting holding by major shareholders and insiders, StoxPlus data showed. This high free float shares would make it hard to MBB prices to move too far either side, analysts pointed out.
On debut, MBB share prices moved in a range of VND13,800- VND14,500 or a spread of VND700 or 5% out of debut spread of 40% (+/-20% limits). But MBB set record high volume of 2,719,290 shares changed hands of which foreigners bought 7,800 shares accounting for only 0.28% trading volume.
The benchmark VN Index dropped 6.99 points or 1.66% to close at VND413,82. The gauge has declined 70.84 points or 14.62% year to date on tightening monetary policy.