• We attended GAS’s AGM on May 29. Overall, management shared its optimism about more LNG imports coming in H2 2024 (due to high mobilization from EVN and for Nhon Trach 3 & 4’s test run) and coming years which confirm our forecast for rising volume of the LNG Thi Vai terminal from 2025 onwards. 

• GAS set its 2024 business guidance with revenue of VND70.1tn (-22% YoY) and NPAT of VND5.8tn (-50% YoY). Lower NPAT YoY is due to expected lower YoY gas sales volume as well as a Brent oil price assumption of USD70/bbl vs USD83/bbl in 2023. This NPAT guidance is equivalent to 52% of our projection, which we attribute to GAS’s caution as it beat its guidance by ~60% over the past five years.  

• That being said, GAS also released 5M PBT of VND5.2tn, which accounts for 39% of our full-year forecast, slightly trailing our expectation. As a result, we see a potential slight downside risk to our 2024 earnings forecast, pending a fuller review.  

• Three agreements were approved at the AGM to purchase gas feedstock from the Nam Du - U Minh, Thien Nga - Hai Au, and Khanh My - Dam Doi fields, with expected total volume of approximately 11 billion cubic meters. We estimate this will help to increase domestic gas supply by ~10-20% from 2027, which implies slight upside to our long-term earnings forecast, pending a fuller review. The GSA – Gas sales agreement to Nhon Trach 3&4 was also approved, with estimated volume of ~0.98 billion cubic meters p.a. (which ensures ~75% volume of LNG Thi  Vai terminal phase 1’s capacity). 

• Shareholders approved to pay a cash dividend of VND6,000 for 2023 (implied dividend yield of 7%, record high in the past 10 years) vs our DPS forecast of VND3,000. GAS set its 2024 dividend to pay 20% of par value, expected to be in cash. Share capital raising by 2% via stock dividend was also approved at the AGM. 

• We currently have an OUTPERFORM rating for GAS with a target price of VND82,000/share. 

GAS guided for capex of VND1.9tn in 2024, equivalent to 17% of our 2024F forecast. The guidance includes capex for the Thi Vai LNG terminal – Phase 2, Son My LNG terminal, Block B gas pipelines, and other projects. We attribute lower-than-expected capex to minimal spending on Son My LNG terminal and Block B in 2024. 

GAS has secured gas sales to almost all power plants in the southeast region when the old contracts expire, which ensures LNG consumption in the years to come. So far, GAS has come to an agreement to sell LNG to the Phu My 3 and Phu My 2.2 BOT plants. The sales volume to Nhon Trach 1 is not yet quantified and is waiting for EVN and POW’s negotiation on contracted volume. In addition, GAS still commits to sell 1.8 billion cubic meters to the Phu My plants of EVN GENCO3 and ~800 million cubic meters to NT2. 

Detailed pricing for LNG is not yet disclosed. In general, GAS still imports LNG at the spot price in the short term, while in the long term, it plans to import approximately 30% spot and 70% term. In addition, the LNG import price for upcoming contracts in 2024 is higher than the previous one, which implies slight upside to our 2024 LNG price projection.