VJC – Update – 20180326

• FY17 was a successful year for VJC despite slower than expected fleet growth in 4Q2017. But higher fares due to fuel price pass-through could crimp growth in future years. We increase our target price but maintain our HOLD rating as VJC is already trading at a substantial premium to peers.
• We expect 2018 transport revenue to reach VND21,335bn (+25.5%) due to 1) 18.3% passenger volume growth and 2) 6% passenger yield growth as VJC could still pass on incremental fuel costs to passengers.
• We increase our target price by 26.5% as the company achieved superior FY17 business performance compared to peers.

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