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CTG - Prudent provisioning drags on earnings - Earnings Flash

CTG released results for FY2017 with the bottom line reaching VND7.5 trillion (USD328 million, +9.3% Y-o-Y, 4% lower than our forecasts). Despite 29.5% Y-o-Y growth in PPOP, provision expenses surged 66.1%, leading to a 9.3% increase in profit vs 2016. In our view, the investment case depends largely on an attractive valuation, sound asset quality and corporate franchise strength. Due to improving asset quality we believe a higher TP may be warranted in our next update.