REE [OUTPERFORM +16.4%] - Real estate sales, M&E earnings rebound to outweigh lower power earnings in 2024

- We cut our target price (TP) for REE by 13% and downgrade from BUY to OUTPERFORM.
- Our lower TP is driven by our 13% lower aggregate 2024-2028F NPAT-MI projection. This is mainly due to 21%/10% decreases in our aggregate 2024-2028F earnings forecasts for REE’s power and office leasing segments, respectively.
- We forecast 2024F NPAT-MI to increase 5% YoY to VND2.3tn mainly due to (1) a jump in real estate earnings, (2) VND141bn net profit from M&E vs a VND9bn net loss last year, and (3) 11% YoY higher earnings from office leasing with the commercial operation of E-town 6. These factors outweigh 20% YoY lower NPAT-MI from the power segment, which is mainly due to lower profits from hydropower plants.