Pyn Elite Fund Projects Strong Profit Growth for a Bank in the Second Half of 2024

In its assessment of Tien Phong Commercial Joint Stock Bank (TPB), Pyn Elite Fund stated that although initial credit demand is weak, TPB has established a rigorous working process and aims to grow its loan portfolio by an additional 18% this year.

According to a recent report on its activities in August, the performance of Pyn Elite Fund increased by 3.13%, outperforming the 2.6% rise of the VN-Index. This foreign fund emphasized that the growth momentum came from the strong upward trend of bank stocks and Dabaco (DBC) shares in its portfolio.

For the first eight months of the year, the investment performance of Pyn Elite Fund reached nearly 17% (higher than the market's overall increase of 13%). The fund's managed portfolio size amounted to 813 million EUR (approximately 22.2 trillion VND) at the end of August.

In the top 10 largest investments, bank stocks remain dominant, comprising 6 out of the 10 names: STB, MBB, HDB, TPB, CTG, and OCB. In August 2024, DBC shares surged with an increase of 10.9%, the highest in the portfolio. Following that, CTG and HAX recorded performances of 9.5% and 6.7%, respectively. In contrast, the stocks ACV, MIG, and CMG reported negative performance.

Regarding the macroeconomic situation, Pyn Elite Fund reported that the USD weakened by 4.1% in August following signs of cooling in the U.S. labor market and indications of interest rate cuts from the Fed. This alleviated pressure on most Asian currencies, leading to an average recovery of 3.5% against the USD.

The Vietnamese Dong appreciated by only 1.5%, which is quite modest. The fund emphasized the State Bank of Vietnam's (SBV) ability to rebuild foreign exchange reserves and expressed expectations that the Dong will strengthen further as the Fed begins to cut interest rates.

In its assessment of Tiên Phong Commercial Joint Stock Bank (TPB), Pyn Elite Fund noted that the bank faced obstacles in 2023 due to a shift towards corporate bonds and consumer finance. The bank responded by divesting from credit related to troubled corporate bonds and shutting down its consumer finance operations.

In the first half of this year, TPB completed its final provisioning for non-performing loans from 2023. Despite initially weak credit demand, TPB has established a rigorous working process and aims to grow its loan portfolio by an additional 18% this year.

According to Pyn Elite Fund, the recovery of the real estate market has boosted housing project financing. TPB is expected to achieve its full-year profit target of +34% year-on-year, with projected profit growth of 75% in the second half of 2024, thanks to lower provisioning pressures.