Attractive valuation
Mr. Tran Hoang Son - Market Strategy Director of VPBank Securities Company (VPBankS) - commented that banking stocks still have great potential for recovery, despite short-term adjustments.
"Regarding valuation, many banking stocks are still quite attractive compared to the time when the VN-Index was around 1,320 - 1,340 points. This is an opportunity for investors who want to buy financial - banking stocks this year" - Mr. Son said.
The prospects of banking stocks are also reinforced by expectations of upgrading the Vietnamese stock market. In the March review, FTSE Russell noted efforts to improve information operations and market upgrading processes.
In particular, Circular 68 has allowed foreign investors to conduct transactions without having to pay in advance (non-pre-funding). The possibility of Vietnam applying the KRX system in May and meeting the standards in September is very high. Therefore, financial - banking stocks will benefit significantly" - Mr. Son predicted.
Mr. Son also said that this is the right time for investors to hold bank stocks with a medium and long-term vision, especially when the KRX trading system is about to go into operation, expected to significantly improve liquidity and transparency of the market.
Sharing the same view, SSI Research experts assessed that the valuation of banking stocks is currently at an attractive level, with the average P/B coefficient of the whole industry decreasing by about 1.2 times - equivalent to the bottom of the COVID-19 pandemic and real estate bond crisis in 2022.
In that context, many stock codes have the potential to increase in price by 10 - 30% within 12 months, depending on business prospects and market conditions.
Profit growth and accumulation potential
According to SSI Research, banking stocks have many bright spots after a short-term correction. Shared commercial banks are planning to increase average pre-tax profit by about 17% in 2025, close to SSI's forecast of 18%. Target credit growth is also pushed up, averaging about 21% over the same period last year, although net interest margin (NIM) may be under pressure due to increased competition in the industry".
SSI Research analyzed that in terms of asset quality, most banks maintain the goal of controlling the bad debt ratio below 2%, except for some units such as VIB and OCB.To consolidate capital, most banks choose not to divide cash dividends, prioritizing profits to serve credit expansion.Some major banks such as BIDV, Vietcombank, VietinBank, MBBank are expected to increase charter capital through individual issuance.
In the banking group, SSI Research highly appreciates stocks with a stable mobilized capital foundation and business activities associated with the recovery of the domestic economy as well as the real estate market.
The codes that are positively evaluated include: Vietcombank (VCB), VietinBank (CTG), MBBank (MBB) and Techcombank (TCB). In particular, HDBank (HDB) is also considered to have the ability to expand market share thanks to the advantage of being assigned the task of restructuring weak banks, along with a more preferential credit limit this year.
Notably, two stocks VPBank (VPB) and TPBank (TPB) after falling sharply in recent adjustments are now entering the low valuation zone, creating attractive trading opportunities for investors in short and medium-term strategies.
With attractive valuations, good profit prospects and positive changes from market policies and infrastructure, banking stocks are still considered one of the options worth considering for investors in the medium and long term.
Choosing the right stock code, combined with a flexible holding strategy will help investors make good use of the growth cycles of the industry group that plays a pivotal role in the stock market.
