PVS – Management expects Block B project to receive final investment decision in early Q2 2024

87 shareholders (representing 60.2% of total outstanding shares) attended PVS’s EGM on February 2.
Management expects the Block B project to receive a final investment decision (FID) in early Q2 2024 – in line with our expectation (H1 2024).
PVS targets revenue from the mechanical & construction (M&C) segment for 2024 of VND13tn (USD535mn) including VND4.5tn (USD185mn) from the Block B project. We forecast 2024 M&C revenue at VND19tn (USD809mn), including VND6.6tn (USD272mn) from Block B.
The EGM approved the key terms of the EPCI#1 contract of the Block B project (contract value to PVS of USD493mn). PVS guided for a net profit margin of 4%, implying estimated net profit to PVS of USD20mn. We see potential downside risk to our revenue forecast for Block B for 2024, but see slight upside potential to our 2024-2028F M&C gross margin assumption, pending a more comprehensive review.
PVS is joining bidding for several offshore wind M&C contracts and expects to win 1-2 contracts in the coming time. The estimated contract value of such contracts is USD300-500mn per contract. We see upside potential for our forecast of 2024 offshore wind M&C revenue.
We currently have a BUY rating for PVS with a target price of VND43,700/share.