- We maintain our target price for PVS at VND33,000/share and reiterate our BUY rating.
- PVS announced that its Q1 2023 recurring NPAT-MI increased 27% YoY to VND214bn, which was mainly due to the gross profit margin of the mechanical & construction (M&C) segment improving to 3.3% and resilient profit from floating oil storage joint ventures (FSO/FPSO JVs). Q1 2023 revenue and reported NPAT-MI achieved 17% and 26% of our respective full-year forecasts and were in line with our expectation.
- We note that VND157bn (USD6.7mn) of profit from FSO/FPSO JVs in Q1 2023 completed 45% of our full-year projection. As the contract negotiation for FPSO Ruby II is ongoing, we therefore see risk for a retrospective adjustment if the final day rate is lower than the current rate of USD92,500. We conservatively forecast the FPSO Ruby II’s day rate at USD40,000 in 2023.