Renewable Power Sector Thought Piece - Top stocks to benefit from growth in renewable power

Global renewable power trend benefits PVS. The International Energy Agency projects the total installed capacity of global renewable energy to increase at a 13% CAGR in 2020-2030F. China/India/Taiwan target to double/triple/quadruple their renewable power capacities by 2030. Taiwan has positioned itself as the offshore wind power pioneer in Asia and targets its offshore wind power capacity to increase ~9x to 14 GW in 2022-2030. Many governments and international organizations have also allocated budgets to finance renewable power projects. Tariffs for renewable power in Taiwan (which are 2x Vietnam’s tariffs) are the most favorable, implying a high probability of this country meeting its offshore wind power target. As there are only a few mechanical & construction (M&C) contractors in the offshore wind power industry in Asia-Pacific, we believe PVS — which has signed contracts for projects with Orsted in Taiwan — will have a significant market share in the region’s offshore wind power M&C segment. We raise our target price for PVS by 8% to VND33,000/share (projected TSR of 30.6%) and reiterate our BUY rating.

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