REE announced resilient Q1 2023 results with revenue and NPAT-MI increasing 16% YoY to VND2,369bn and 8% YoY to VND745bn, respectively. The increase in NPAT-MI is mainly due to strong power and water earnings (+4% YoY and +35% YoY, respectively). Power earnings continued to increase despite 2022’s high base thanks to robust hydropower earnings, which more than offset lower earnings from solar power, wind power and Pha Lai Thermal Power Joint Stock Company (HOSE: PPC). 

REE's Q1 2023 revenue and NPAT-MI were in line with our expectations as they completed 24% and 28% of our respective full-year forecasts. We expect neutral weather conditions this year compared to 2022, which implies lower rainfall and thus lower volume from the hydropower portfolio. As a result, believe hydropower earnings in future quarters will be lower and see insignificant change to our 2023F earnings.