- We lower our target price (TP) for POW by 13% to VND14,400/share but upgrade our rating from OUTPERFORM to BUY. 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 lower TP is due to 100 bps and 300 bps increases in our house equity risk premium and cost of debt, respectively, as well as a 4% downward revision to our aggregate 2022-2031F NPAT forecast. These factors outweigh the positive impact of rolling our TP to end-2023. 

- The decrease to our aggregate 2022-2031F NPAT forecast is due to our lower overall volume forecast. We lower our volume and earnings forecasts the most for the Ca Mau plant (due to strong competition from wind power) and Nhon Trach 1 (due to POW potentially securing a lower-than-expected amount of gas feedstock from GAS).

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