- 2025-04-01T00:00:00
- Company Research
CEO expressed optimism on the power sector amid resolving legal bottlenecks and strong public investment supporting M&E. Long-term NPAT growth target reaffirmed at 15% CAGR.
We see slight upside potential to 2025F NPAT-MI forecast (VND2,411bn, +21% YoY), with potentially higher-than-expected earnings from real estate segment. VSH’s strong Q1 result confirms our 2025 Power NPAT forecast while M&E segment has provision write-back buffer to support our forecast, pending a fuller review. We currently have OUTPERFORM rating for REE with TP of VND76,100.
REE guided 2025 business results to recover from 2024 bottom with revenue of VND10.2tn (USD403mn, +22% YoY, 102% of 2025F) and NPAT-MI of VND2.4tn (USD96mn, +22% YoY, 101% of 2025F). NPAT-MI guidance aligns with our forecast, in which stronger-than-expected real estate earnings guidance to offset lower-than-expected power profit guidance. Over the last 5 years, REE completed 100% of its guidance.
2024 dividend plan: DPS of VND1,000 (to be paid in April 4, 2025) and 15% stock dividend. 2025 interim DPS of maximum VND1,000.
Targeting 3x power capacity by 2030F (adjusted for ownership): REE targets to expand its power capacity to 3,000/4,000/5,000 MW by 2030/32/35F from 1,016 MW as end-2024. This is aggressive vs our forecast for ~2,000 MW by 2030. Management expects this to be driven by: 100 MW in 2025, 500 MW in 2026-2028. REE expects to gain investment licenses for three wind projects (176 MW) in Q2 2025 via bidding. REE stated that it expects to secure 500 MW wind and 1,500/1,000 MW floating solar by 2030/35F in Revised PDP VIII.
AGM appointed Mr. Ashok Ramachandran (born in 1980 ) to be the new BoD member, replacing Mr. Huynh Thanh Hai (cum. former CEO). Mr. Ashok is an experienced executive with over 20 years in engineering and business leadership across Australia, Vietnam, Malaysia, India, and South Asia, currently serving as Chief Operating Officer at JSW Energy—a leading Indian power company—and formerly as CEO & President of Schindler India & South Asia, part of the global elevator and escalator giant Schindler Group. Additionally, Ms. Mai Thanh will return as Chairwoman while Mr. Ashok will be the new CEOl, per management.
2025 ESOP plan: approved 500,000 shares (~0.1% O/S shares) at VND10,000/share with 3-year lockup, expected to be issued in Q1 2026.
Power segment: 2025G NPAT-MI of VND1,054bn (+5% YoY, 93% of 2025F). REE targets selling to both EVN and large users (DPPA).
Confident to achieve IRR ~ 12% for solar and wind power with EVN’s recently proposed new tariff: VND1,383/kWh for solar in northern region, VND1,644/kWh for onshore wind.
Feasible DPPA implementation: some potential customers only require a finalized selling price from REE while they will pay services fee.
CoD timeline: Duyen Hai 2 (48MW) to come online in Q4 2025, Tra Khuc 2 hydropower (30 MW) by early-2027; 176 MW onshore wind by Q4.2026, aligning with our forecast.
VSH guides 2025G NPAT-MI of VND541bn (+21% YoY, 129% of 2025F). 80-day sales volume in Q1 2025 arrived at 321 mn kWh (+32% YoY), beating our forecast. REE considers not pursuing higher tariff in the short-term for Thuong Kon Tum post successful refinancing.
Normalization payment cycle from EVN: currently takes 2.5 months vs 2 months previously.
REE expects to secure an investment license for waste-to-energy project, capacity of 40MW.
Real estate segment: 2025G NPAT-MI of VND262bn (+8x YoY, 128% of 2025F). REE aims to book VND156bn NPAT from land bank sales (Thai Binh Province) while continue selling The Light Square project. REE also targets to develop residential/office projects alongside key infrastructure projects like Metro and ring road 3 in HCMC.
M&E segment: 2025G NPAT-MI of VND165bn (+10% YoY, 72% of 2025F). Signed new contract value of VND5.1tn in 2024, mainly from Long Thanh International Airport and Metro No.1 (HCMC). Targeting to book provision reversals of ~VND150bn in 2025.
Office leasing segment: 2025G NPAT-MI of VND541bn (+14% YoY, 91% of 2025F). Targeting 97% occupancy by end-2025 (from 92% as end-2024), with E-town 6 at 75% by end-2025.
Water segment: 2025G NPAT-MI of VND328bn (+23% YoY, 101% of 2025F). Song Da Water JSC (SCW) got a water tariff hike of 52% to VND7,767/m3, effective from Q2 2025. Doubling its capacity to come online by end-2025.
Business expansion: Exploring LNG-fired power (M&E, EPC, and potential equity investing) and data centers (land leasing and infrastructure services).
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