- We raise our target price (TP) for NT2 by 1% to VND29,000/share and reiterate our BUY rating. Our higher TP is mainly due to (1) our 7% higher 2026-30F aggregate reported NPAT-MI projection (respective changes of +23%/+3%/+7%/+6%/-2%) and (2) 5% QoQ higher net cash balance, which outweigh (3) our 1 ppt increase in risk-free rate from 6.0% to 7.0%.
- Our higher 2026-30F aggregate reported NPAT projection is mainly due to (1) 2% higher aggregate sales volume, (2) 1% lower gas price on average and (3) 33-34% lower maintenance expenses for 2026-27F (in accordance with Circular 99 which removes the advanced booking accounting policy).
- We forecast 2026F reported NPAT-MI to decline slightly (-6% YoY), due to (1) lower FX loss compensation receipt, (2) a 34% YoY lower price spread, (3) 37% YoY higher SG&A expenses, and (4) a doubling tax rate to 20%, which outweigh (5) 39% YoY sales volume growth, (6) ~VND390bn YoY lower depreciation expenses and (7) 30% YoY lower maintenance expenses.
- We forecast 2027F core NPAT-MI to grow 6% YoY to VND1.1tn from 2026 high base, driven by (1) 24% YoY higher financial income on a stronger gross cash balance (VND4.4tn end Q2 2026, 74% of mkt cap), (2) 1% YoY sales volume growth, and (3) a 1% YoY higher price spread, supported by sector CGM price expected to grow 18% YoY.
- NT2’s valuation is attractive with a 2026F PER of 6.1x, 57% lower than the 5Y average of comparable single power plant peers (14.3x). Its TTM P/E is at a historic low.
- Downside risks: Lower-than-expected price spread.
- Upside: Capacity expansion with Nhon Trach 5 or higher-than-expected dividend yield.
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