• We attended GEX’s annual general meeting (AGM) in Hanoi on March 28, 2024. Overall, we like the management strategy to focus on operational efficiency and risk management in the near-term, slowdown aggressive expansion, cooperate with Singapore partners including Semcorp (on energy segment) and Fraser Property (on industrial  real estate segment). GEX stated that they do not prioritize to acquire further  stake in VGC. Additionally, the profit from 245-MW power portfolio divestment is to have partner with strong financial and technical capability to help GEX execute large-scale renewable power projects (pipeline portfolio of 3.9 GW), to lower gearing and to have resources to invest in Titan Corp (ready-built-factory business), Tran Nguyen Han 5-star hotel and capacity expansion for Song Da Water JSC. 
• GEX’s management set its 2024 guidance with revenue of VND32.3tn (+7.7% YoY) and PBT of VND1,921bn (+37.5% YoY) vs 2023’s actual revenue of VND30tn and PBT of VND1,397bn. We note that GEX’s PBT guidance includes the potential gain from the divestment of its 245-MW power portfolio, which we estimate to be VND950bn. GEX’s 2024 revenue and PBT guidance are equivalent to 101% and 79% of our respective full-year forecasts which we attribute to GEX’s conservative estimates in Holdco expense and VGC’s PBT while GEE’s PBT guidance is broadly in line with our expectation (GEX has 50.0% stake in VGC and 80% stake in GEE)
• GEX plans to not pay any dividends for 2023 vs its target set at 2023 AGM of 15% (not specified whether it would be cash or stock). 
• GEX targets to pay 2024 cash dividends of VND1,500/share vs our forecast of VND1,000/share although management understand it is necessary to maintain a low debt ratio in order to raise financing at low cost. AGM also approved BOD to make interim cash dividend payment, once or several times depending on company’s operation.
• GEE plan to increase share capital by 10% via public auction with starting price of at least VND30,000. This implies TTM P/E of 12.1x and dividend yield of 6.7% which we think are reasonable. 
• Shareholders approved the 2024 ESOP plan with 8 million shares (equivalent to 0.9% outstanding shares) issued at VND10,000/share with a three-year lockup period.
• We currently have a  MARKETPERFORM rating for GEX with a target price of VND23,400/share.

VGC conservatively guided for 2024 PBT decline of 24% YoY and equivalent to 79% of our forecast

VGC's 2023 revenue mainly came from projects such as Yen Phong 2C IP, Yen Phong Expansion IP, Yen My IP, Phu Ha IP... with a total land area handed over of 179 ha.

GEE guided for PBT growth of ~20% YoY, broadly in line with our forecast, weak Q1 result but we expect stronger profit in coming quarters with CAV’s strong newly-signed contract and expected good margin

• GEE’s management set its 2024 guidance with revenue of VND18.4tn (+10.7% YoY) and PBT of VND1,158bn (+19.7% YoY) vs 2023’s actual revenue of VND16.6tn and PBT of VND967bn. GEE’s 2024 revenue and PBT guidance are equivalent to 104% and  96% of our respective full-year forecasts. As per management, PBT guidance includes ~VND380bn divestment gain ( in line with our forecast).
• GEE’s 1Q prelim results are behind of our forecast. GEX announced GEE’s prelim Q1 result with revenue and PBT of VND3.3tn and VND90bn, achieving 19% and 7% of our full-year forecast. This reflects that the electrical equipments segment are recovering slowly in Q1 and wait for stronger recovery of real estate sector.
• GEX expects CADIVI - the leader in electrical equipment segment to maintain its historical four-year high GPM in 2023 to 2024, reaching 10.9% (vs our forecast 10.8%). As of mid-March 2024, CADIVI has won 703 bidding packages with a total contract value of VND6.3tn, achieving 58% of our 2024 revenue forecast.
• Shareholders approved to pay the remaining 2023 5% cash dividend (VND500/share) out of the total of 20% cash dividend (VND1,500/share has been paid). In addition, GEE targets to pay 2024 DPS of VND2,000/share (not specified whether it would be cash or stock) vs our our forecast for DPS of VND2,000/share. AGM also approved BOD to make interim cash dividend payment, once or several times depending on the company’s operation.
• Shareholders have endorsed BOD to execute the auction-based public offering of 30 million additional shares (equivalent to 10% of outstanding shares) for both domestic and foreign retail/institutional investors. The selling price must not fall below the average reference price of the previous 30 trading days and must be at least VND30,000/share. This implies TTM P/E of 12.1x and dividend yield of 6.7% which we think are reasonable. 
• GEE plans to complete divesting the remaining 10% stake in Gelex Quang Tri in H1 2024 (90% stakes divested in 2023).
• GEE plans to move from UPCoM to HOSE in 2024, choosing the appropriate timing in line with the stock market conditions and practical circumstances to complete the procedures.
• Shareholders approved the 2024 ESOP plan with 5 million shares (equivalent to 1.7% outstanding shares) issued at VND10,000/share with a five-year lockup period.

GELEX and its member companies are oriented towards developing a new form of industrial park, which will transform into an industrial city—a fusion of production, living, and commercial spaces aimed at attracting the world’s leading corporations. This development will bring higher added value and make efficient use of land units.

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