- We lower our target price (TP) for PLX by 43% to VND28,400/share and downgrade our rating from BUY to OUTPERFORM due to our 1) 29.3% lower aggregate 2022-2026F reported NPAT-MI and 2) 100-bp/300-bp increases in our equity risk premium/cost of debt assumptions. 

- We lower aggregate 2022-2026F earnings as we decrease 2022-2026F profit per liter by ~14% on average. We cut 2022F NPAT-MI by 88.2% due to 1) PLX having to sell at higher volume to relieve the domestic supply shortage and 2) premiums and transportation regulated costs in base prices not being enough to cover actual premiums and costs. 

- With the largest nationwide distribution network and storage, we believe PLX will benefit from Vietnam’s projected long-term petroleum demand growth of 5.5% in 2021-2026F (projected by the Government) and forecast an EPS CAGR of 11% in 2021-2026F. There is also potential upside to our growth projections from non-oil services at stations and liquefied natural gas (LNG) storage & supply (page 23).

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