- We raise our target price (TP) for GEX by 12% and upgrade our rating from MARKET PERFORM to OUTPERFORM. Our higher TP is due to the parent’s higher cash balance and the positive impact of rolling our TP horizon forward to mid-2025, which outweighs a 3% cut in our aggregate 2024-2028F NPAT-MI forecast (respective changes of -15%/-23%/-5%/+12%/+1% for 2024/25/26/27/28F). Additionally, our higher valuation for GEX is driven by an 11% higher valuation for electrical equipment (higher target PE and CAV’s average 2024/25F earnings to outweigh lower earnings from THI) and 17% higher valuation for industrial parks (mainly from the Song Cong IP), outweighing a 15% lower valuation for construction materials (page 6).
- We lowered our 2024-2028F NPAT-MI projection for GEX due to 3% and 2% lower forecasts for VGC and GEE, respectively, following weaker-than-expected Q1 2024 earnings in construction materials and the transformer subsidiary (THI).
- We forecast 2024F reported NPAT-MI of VND853bn (+158% YoY) as we expect (1) sales of electrical equipment to recover by 16% YoY, and (2) PBT of VND950bn from divestment of its renewable power portfolio (page 6). We project 2023-2028 NPAT CAGR of 41%.
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