GEX [OUTPERFORM +16.2%] - Power divestment gain to boost 2024F reported earnings

- We cut our target price (TP) for GEX by 2% and downgrade our rating from BUY to OUTPERFORM.

- Our lower TP is mainly due to an 8.4% cut in our aggregate 2023-2027F recurring NPAT-MI forecast (respective changes of +4%/-14%/-2%/-10%/-12% for 2023/24/25/26/27F), which is partly offset by a 19% lower net debt balance (at the parent company) at end-Q3 2023 vs end-Q2 2023, and an estimated VND3.3tn cash from renewable power divestment.

- Our lower aggregate 2023-2027F recurring NPAT-MI projection is primarily due to the removal of power earnings from H2 2024 onwards and our lower earnings forecasts for construction materials following lower-than-expected 9M 2023 results. We expect GEX to complete the divestment of its 245-MW renewable power portfolio in H1 2024.