- We lower our target price (TP) for PVD by 14% to VND30,800/share but maintain our OUTPERFORM rating as PVD’s share price has declined 15% over the last three months. Our lower TP reflects a 14% lower aggregate 2024-2028F reported NPAT-MI forecast (respective changes of -9%/-26%/-13%/-12%/-12% for 2024/25/26/27/28F). 

- Our lower aggregate reported NPAT-MI forecast is due to (1) lowering our projections for well-related services revenue and lower profit from associate companies following H1 2024’s results, and our assumption for a delay in Block B’s groundbreaking from mid-2024 to late-2024. (2) We increase cash operating costs by 2% after H1 2024 results, and (3) delay PVD’s second-hand jack-up rig acquisition, shifting earnings contributions from early to mid-2025.

- We forecast 2025F recurring/ reported NPAT-MI to grow by 45%/58% YoY, driven by projected 7% YoY increase in the average jack-up (JU) day rate, robust growth from well services and our expectation for no VND depreciation in 2025. We expect domestic exploration & production (E&P) activities to enter a new growth cycle in H2 2024, driving double-digit profit growth from 2025 onwards, with well-related services and profits from associates benefiting, alongside further day rate improvements in the tight SEA jack-up market.

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