• The Government released Decision 262 which provides details for renewable power capacity with specific names by province and region. Particularly, additional onshore wind and offshore wind are guided to reach 17,894 MW and 6,000 MW, respectively, by 2030. Central Vietnam will be the leading region with onshore and offshore wind capacity accounting for respective 47% and 41% of the country’s planned capacity.
• Electricity export potential is specified at 5,000-10,000MW. Hydrogen production is estimated at 5,000MW. Building two renewable power industrial & service centers, one in the north (~2,500MW), one in the southern-central region, and the south (~3,500MW).

Figure 1: Additional renewable capacity by region

Source: Decision 262, Vietcap

We expect this to slightly benefit renewables stocks including TV2, REE, HDG, PC1 & GEX with specified near-term projects listed in Figure 2. REE has the largest additional near-term capacity (~150MW) followed by HDG (70MW), PC1 (43MW), and TV2 (~20MW, adjusted for ownership). Particularly, regarding the Song Hau 2 coal-fired power plant of TV2, it remains in the pipeline with its ground breaking subject to financing arrangements finishing by June 2024. In addition, we see slight upside potential to our TV2’s earnings forecast from the Tan Thuan wind farm phase III and An Dong 1 wind farm, which TV2   stated it potentially has a 25% stake. We also see slight upside potential to REE’s 2024-2028 earnings forecast, with profit contribution from the Tra Khuc 2 - 30MW hydro power plant, pending a fuller review. Regarding  HDG, the near-term development of the 7A Wind Farm phase II represents slight upside to our earnings forecast.

Slight positive impact on POW: The execution plan guides for Nhon Trach 3&4 to come online in 2024 & 2025, respectively, slightly sooner than our forecast.

Slight positive impact on oil & gas stocks: The execution plan also targets COD (Commercial Operation Date) of O Mon II, III & IV in 2027/2030/2028 to use Block B gas feedstock. This re- enforces our forecast for a full final investment decision for Block B in H1 2024, which benefits PVS, PVD, and GAS.

We view this execution plan as positive progress for the power sector after the recent retail electricity price adjustment cycle reducing from six months to three months. We expect a reasonable new pricing mechanism for the renewable power sector to be released in H2 2024 which facilitates a huge recovery for the sector. We currently have a BUY rating for TV2, an OUTPERFORM rating for REE, HDG, & POW, and a MARKETPERFORM rating for PC1 & GEX.

 Figure 2: Renewable power projects by companies

Source: Decision 262 & Vietcap

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