- We maintain OUTPERFORM rating for PVS despite cutting our TP by ~33%. Our lower TP is due to 1) a ~35% cut in our aggregate 2022-2026F NPAT-MI and 2) our higher equity risk premium & cost of debt assumptions outweighing positive impact of rolling our TP to end-2023.

- We cut our 2022-2026F NPAT-MI by ~35% due to 1) our 180-bp lower gross profit margin assumption for the M&C segment caused by higher-than-expected transportation, labor & material costs and 2) a ~19% lower aggregate 2022-2026F M&C revenue.

- We forecast flat 2023F NPAT YoY as we expect lower profit from FPSO Ruby II to offset higher M&C profit. We expect PVS to book more profit from international wind power contracts after finishing construction in 2023 and a higher margin from the domestic White Lion phase 2 project.

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