- We raise our target price (TP) for GEX by 9% and maintain our BUY rating.
- Our higher valuation is mainly due to (1) a +18% electrical equipment valuation (+13% for GEE’s NPAT-MI projection and higher target P/E), (2) including the Dong Nai residential project/Gia Binh airport, and (3) positive impacts from rolling our TP horizon toward mid-2027. These outweigh (4) Hai Phong residential’s -34% valuation (lower stake), (5) VCW’s -40% valuation (lower 2026F NPAT-MI and target P/E), and (6) VND3tn higher parent net debt (page 6).
- We lower GEX’s aggregate 2026-30F reported NPAT-MI by 6%, mainly driven by (1) 5.8x higher Holdco expenses (mainly interest expenses funding residential real estate and Gia Binh), and (2) VCW’s -35% aggregate NPAT-MI (on higher depreciation expenses from Phase 2). These outweigh (3) GEE’s +20% aggregate NPAT-MI (driven by 10% higher-than-expected 2025F core NPAT-MI and higher 2026-30F revenue), and (4) VGC’s +9% aggregate NPAT-MI (11% higher IP related gross profit).
- We project 2026F reported NPAT-MI of VND1.5tn (+1% YoY) as +32% YoY core NPAT-MI (VGC/VCW core expansion amid flat GEE core) slightly outweighs projected no one-off income (vs VND789bn in 2025).
- GEX's valuation looks attractive with a PEG of 0.7 based on a 2026-29F EPS CAGR of 39% and 2026F P/E of 26.9x. We attribute the high 2026F P/E to a robust 2026-29F EPS CAGR.
- Upside potential: More land bank via BT projects. Downside risk: Securities investment losses.
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