We raise our target price (TP) for GEG by 11% to VND23,300/share but maintain a MARKET PERFORM rating. GEG is a pioneer in Vietnam’s green energy sector and has a current portfolio of 446 MW. It targets to have a 2,000 MW capacity in the long term, which we believe will be achievable with its new strategic partner JERA — the largest power generator in Japan.

We raise our DCF-based TP due to our removal of a 15% valuation discount, which outweighs a 20% cut in our 2022F NPAT-MI and 50-bp increase in our house risk-free rate assumption.

GEG is the company under our coverage that will benefit the earliest when Power Development Plan VIII is approved and the renewable power sector gets a new pricing mechanism, and we think its 2023F P/E of 16.1x is fair vs the four-year median regional peer P/E of 16.3x.