- We raise our target price (TP) for POW by 3% to VND14,800/share and maintain our BUY rating. We view POW as a solid play on Vietnam’s resilient power consumption and structural transition to LNG with its future Nhon Trach 3 & 4 LNG-fired plants. 

- Our higher TP is due to our 3% higher 2023-2027F aggregate NPAT forecast as our increased profit projections for the Ca Mau, Vung Ang and NT2 plants outweigh our lower profit projection for Nhon Trach 1. One of the reasons we raise our aggregate NPAT for the Ca Mau and NT2 plants is our lower gas price assumptions.

- We are optimistic on POW’s near-term growth with 2023 and 2024 projected EPS growth of 24% YoY and 44% YoY, respectively. We forecast 2023 NPAT to be driven by +26% YoY volume growth (13% higher than POW’s guidance) after three consecutive annual declines due to COVID and technical issues. Meanwhile, the sector’s outlook is bright with resilient projected national electricity consumption (+8% YoY), a tighter national supply, less competition from hydropower and a strong competitive generation market (CGM) price outlook (+7% YoY). 

Powered by Froala Editor