- We cut our target price (TP) for NT2 by 14.5% to VND20,100/share and downgrade our rating from MARKET PERFORM to UNDERPERFORM. 

- Our lower target price is driven by our 23% lower aggregate 2024-2028F reported NPAT forecast, which outweighs our slightly lower WACC assumption. We trim our WACC assumption by 0.3 ppts to 12.6% as we increase our debt-to-capital ratio assumption from 5% previously to 10%, which is our average forecasted debt-to-capital ratio for NT2 in the next three years. 

- Our lower aggregate 2024-2028F reported NPAT projection is primarily due to a substantial reduction in our 2024F reported NPAT forecast from VND458bn previously to a net loss of VND249bn. This is mainly driven by our 49% cut in 2024F sales volume forecast to 1.9 billion kWh (-33% YoY), following the National Load Dispatch Center (NLDC)’s significantly low mobilization plan for NT2 (as per industry players).  Additionally, we cut our 2025F reported NPAT projection by 25%, which is primarily due to our 9% lower sales volume forecast following the substantial reduction in our 2024F sales volume forecast. 

- NT2’s 2024/25F projected EV/EBITDA multiples of 27.3x/7.1x, respectively, look expensive vs the 4Y average median multiple of its peers at 6.6x. The 2024 implied dividend yield at our target price is 5% (in line with current 12-month deposit rates). We believe this should provide support for the share price, together with our forecasted strong recovery in dividends for 2025F and 2026F. 

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