- 2022-11-21T00:00:00
- Company Research
- We upgrade our rating for PVD from MARKET PERFORM to OUTPERFORM despite cutting our target price by ~27% to VND15,400/share as the company’s share price has declined ~35% over the past three months. Our lower TP is due to our 1) ~12% lower 2022-2026F aggregate reported NPAT-MI, 2) 100-bp higher equity risk premium and 3) 280-bp higher cost of debt.
- We cut our aggregate 2022-24F reported NPAT-MI ~38% but raise our 2025-26F reported NPAT-MI ~3%. Our lower 2022/23/24F reported NPAT-MI is due to higher projected operating costs and interest expenses that outweigh our higher day rate assumptions. Meanwhile, our slightly higher 2025-26F reported NPAT-MI is due to higher day rates and normalized operating costs that outweigh increased interest expenses.
- We expect a robust recovery in 2023 with projected recurring NPAT-MI jumping 20.8x YoY from the minimal base in 2022 due to 1) a 24.3% YoY increase of average jack-up (JU) day rates and 2) the drilling fleet operating at 95.1% capacity (vs 87% in 2022).
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