PVD [OUTPERFORM +17.2%] - Feasibility study for new rig acquisition shows bright outlook

- We increase our target price (TP) for PVD by 1.0% to VND30,300/share and maintain our OUTPERFORM rating. Our slightly higher TP is due to our 1.4% higher aggregate 2023-2027F reported NPAT-MI forecast (respective increases of 30.9%/0.4%/0.2% for 2023/2024/2025).

- Our increased aggregate 2023-2027F reported NPAT-MI forecast is mainly due to our 0.4% lower aggregate 2023-2027F operating cash cost assumption.

- We increase our 2023F reported NPAT-MI forecast by 30.9% to USD16.8mn (VND401bn) due to our higher gross profit margin assumptions for the drilling and well-related services segments as well as our higher net other income assumption. We reiterate our expectation for a strong recovery in 2023, which is driven by a 20% YoY increase in PVD’s average JU day rate to ~USD78,000 and a utilization rate of 96% vs 85% in 2022.