- 2024-07-30T00:00:00
- Company Research
- POW released its official Q2 2024 results with revenue of VND9.4tn (USD372mn; +12% YoY) and NPAT-MI of VND401bn (USD15.8mn; +218% YoY). POW’s Q2 revenue increased 12% YoY due to (1) an 11% YoY increase in sales volume and (2) a 1% YoY increase in ASP. The higher YoY output was driven primarily by higher sales volume from Vung Ang (+58% YoY) and Dakdrinh (+12% YoY), which outweigh the 55% YoY plunge from Nhon Trach 1. We attribute the 2x surge in NPAT-MI to (1) a 54% YoY increase in gross profit due to a lower cost per kWh, (2) a 13% decrease in G&A expenses, (3) nearly zero income tax expense, and (4) flat YoY minorities interest. These factors outweigh the 18.0x surge in FX loss.
- Additionally, POW reported that its H1 2024 revenue was VND15.7tn (USD618mn; -1% YoY), and NPAT-MI was VND678bn (USD26.8mn; +3% YoY), fulfilling 48%/48% of our respective full-year forecasts. These results are in line with our current projections. Nearly flat revenue growth was due to (1) flat YoY sales volume growth, where the significant increase in sales volume of the Vung Ang power plant (+69% YoY) offset the output decline in Nhon Trach 1/NT2/Hua Na/Dakdrinh of -78%/-45%/-24%/-12% YoY, respectively, and (2) the almost flat ASP (-3% YoY). However, reported NPAT-MI still slightly increased 3% YoY due to (1) an 11% decrease in the G&A expense, (2) a 36% plunge in income tax expense, and (3) no minorities interest recorded vs VND171bnn in H1 2023. These factors outweigh the 20.0x surge in FX loss.
- H1 adjusted/recurring NPAT-MI was strong, completing 57% of our full-year forecast, which we attribute primarily to the strong performance of the Vung Ang and Ca Mau power plants. We note that POW has not yet booked an insurance compensation for Vung Ang 1 vs our forecast of VND300bn in 2024.
- Overall, we see insignificant changes to our 2024 NPAT-MI forecasts for POW, pending a fuller review.
- We currently have a MARKET PERFORM rating for POW with a target price of VND13,800/share.
Figure 1: POW's H1 2024 sales volume
million kWh | Q2 2023 | Q2 2024 | YoY | H1 2023 | H1 2024 | YoY | % of Vietcap’s 2024F |
Output | 4,338 | 4,825 | 11% | 8,340 | 8,369 | 0% | 50% |
Ca Mau | 1,695 | 1,639 | -3% | 3,098 | 3,110 | 0% | 48% |
Nhon Trach 1 | 227 | 103 | -55% | 489 | 106 | -78% | 11% |
Nhon Trach 2 | 1,054 | 1,026 | -3% | 2,129 | 1,178 | -45% | 57% |
Vung Ang | 1,174 | 1,855 | 58% | 2,107 | 3,563 | 69% | 58% |
Hua Na | 81 | 82 | 2% | 206 | 157 | -24% | 28% |
Dakdrinh | 107 | 120 | 12% | 310 | 255 | -18% | 52% |
Source: POW, Vietcap
Figure 2: POW’s H1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY | H1 2023 | H1 2024 | YoY | % of Vietcap’s 2024F |
Revenue | 8,429 | 9,407 | 12% | 15,854 | 15,650 | -1% | 48% |
COGS | -7,960 | -8,683 | 9% | -14,705 | -14,549 | -1% | 48% |
Gross profit | 469 | 724 | 54% | 1,148 | 1,101 | -4% | 47% |
Selling exp | 0 | 0 | N.M. | 0 | 0 | N.M | N.M. |
G&A | -207 | -181 | -13% | -334 | -297 | -11% | 34% |
Operating profit | 262 | 543 | 107% | 814 | 804 | -1% | 55% |
Financial income | 122 | 131 | 8% | 246 | 232 | -6% | 37% |
Interest income | 97 | 92 | -5% | 206 | 171 | -17% | 32% |
FX gains | -7 | 27 | N.M | 6 | 29 | 358% | N.M. |
Others | 0 | 12 | N.M. | 34 | 31 | -6% | 35% |
Financial expenses | -136 | -229 | 69% | -276 | -383 | 39% | 39% |
Interest expense | -125 | -98 | -22% | -258 | -178 | -31% | 29% |
FX loss | -7 | -138 | 1881% | -10 | -209 | 2023% | 70% |
Others | -3 | 8 | N.M | -8 | 4 | N.M | N.M |
Other non-operating income | -9 | 5 | N.M | 144 | 76 | -47% | 21% |
PBT | 239 | 451 | 89% | 929 | 729 | -22% | 49% |
- Income tax exp | -58 | -1 | -99% | -98 | -62 | -36% | 72% |
NPAT before MI | 181 | 450 | 148% | 831 | 667 | -20% | 47% |
- Minority interests | -55 | -50 | N.M. | -171 | 12 | N.M | 149% |
Reported NPAT-MI | 126 | 401 | 218% | 660 | 678 | 3% | 48% |
Adjusted NPAT-MI * | 156 | 490 | 214% | 562 | 768 | 37% | 57% |
Source: POW, Vietcap (* Excluding one-off items, compensation for FX loss and insurance)
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