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VCB [U-PF -17.5%] - High-quality bank, rich valuation - Update

We are upgrading our rating for VCB from SELL to UNDERPERFORM and raising our TP to VND54,600, representing a total downside of 17.5%. We calculate the fundamental value of the bank at VND42,500 per share. However, we expect the bank to continue trading at a premium to this valuation. To comply with Circular 36, VCB divested from other banks, which contributed 3% to 2017 net profit. We expect a 13% contribution in 2018. CIR is expected to stay at 42% this year. We expect higher interbank