We cut our TP for REE by 8% to VND85,900/share and maintain our OUTPERFORM rating. We are optimistic about REE’s potential capacity expansion in Vietnam’s promising renewable energy sector via rooftop solar & onshore wind power as well as REE’s aggressive target to double its revenue to USD1bn over the next five years vs our forecast of ~USD600mn by 2026F.

Our lower TP is due to our (1) 2% lower aggregate 2022-2026F NPAT-MI and (2) 100-bp and 200-bp higher in-house cost of equity and cost-of-debt assumptions, respectively.

We lower our aggregate 2022-2026F NPAT-MI forecast as we (1) factor in higher interest rates, which edge down the aggregate earnings of the power segment by 3%, and (2) lower the M&E segment’s aggregate earnings by 9% following slow project construction. These factors outweigh our 5% higher aggregate NPAT forecast for REE’s office leasing segment.