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VJC [MARKET PERFORM +5.9%] - Solid operating performance despite slight tempering of growth - Initiation

We initiate coverage on VJC with a MARKET PERFORM recommendation and a +5.9% Total Stock Return. Revenue grew by 38.6% in 2016 with core revenues (excluding sales of aircraft) surging by 43.7% to VND15,917 billion (USD 718 million) driven largely by a 51.0% jump in passenger volumes and 49.1% rise in RPKs. We foresee a 44.2% growth in core revenues in 2017 based on a moderated but still rapid RPK growth of 34.3%, roughly in line with ASK growth; passenger RPK yields will rise by 10.2% on