We attended TV2’s AGM on June 27, 2025. Overall, we see downside risk to our earnings forecast, pending a fuller review, mainly due to management’s projection of low revenue/ earnings from EPC contracts in 2025. Having said that, management is optimistic about the company’s workload in future years with the Execution Plan of Power Development Plan VIII in place, providing opportunities from LNG and nuclear power. We currently have a MARKET PERFORM rating for TV2 with a target price of VND32,200/share.
TV2 guides for 2025 revenue of VND1,362bn (+2% YoY, +7% vs 2024G) and PBT of VND69bn (-14% YoY, +4% vs 2024G). These figures fulfill 63% and 51% of our respective 2025 forecasts. TV2’s management has historically set conservative guidance. We note that since 2016, TV2’s actual performance has beat its guidance by an average of 26% p.a. Having said that, we see downside risk to our 2025F NPAT forecast as the EPC contract for O Mon 4 thermal power plant will not contribute until 2026.
TV2 will pay a cash dividend of VND1,000 per share for 2024, in line with our forecast. For 2025, TV2’s management proposes paying at least that of 2024 (10% cash dividend), which is in line with our projection of a VND1,000 DPS in 2025.
TV2 will participate in the Song Hau 2 thermal EPC if the investor can restart the project (which we believe will require a lot of time).
TV2 expects to be the middleman in DPPA contracts between renewable power investors and foreign/export orientated companies from 2026. It also expects sizeable revenue and low margins in this new business segment.
Stronger EPC revenue in the long term is expected from O Mon IV, at VND4.4tn. Management noted that revenue from the EPC contract in 2025 is expected to be low because the initial phase of the O Mon IV contract mainly involves designing. The majority of the revenue is expected to be recognized in 2026. In the longer term, it might win EPC contracts for O Mon 2, 3, and renewable power.
In 2025 and future years, TV2 will focus on three main areas: (1) Completing key energy projects, including the Tra Vinh biomass power plant, Hau Giang Biomass power plant and Thac Ba 2 hydropower plant , (2) participating in huge projects like the North-South High-Speed Railway, nuclear power, LNG, and offshore wind power sector consultancy, and (3) expanding into international markets, particularly targeting countries with high growth potential in the power sector such as Laos, the Philippines, Malaysia, and Singapore, to diversify its project portfolio.
TV2 shared that Toyo Ink recently received a new document from Vietnam’s Ministry of Industry & Trade (MoIT) and is now progressing with necessary procedures to restart the Song Hau 2 project. TV2 confirmed it is maintaining its full EPC workload as previously committed. However, it also noted that the relaunch of the project depends entirely on the outcome of negotiations between Toyo Ink and the Vietnamese government.
TV2 has announced its role as an intermediary in facilitating DPPA between renewable energy producers and power consumers. It currently has MoUs with two major consumers- H&M Vietnam and First Solar. These are expected to commence in 2026, contingent upon the completion of necessary licensing procedures. TV2 also anticipates significant revenue from this segment, primarily driven by the high volume of electricity transactions.
TV2 and GENCO3 are also actively advancing DPPA contract MoUs with industrial clients, especially Viet Nam Rubber Group (GVR), to supply electricity directly to their industrial parks. The two companies plan to jointly invest in a renewable power plant to supply power to GVR's industrial parks. Specific details regarding the plant’s capacity, ownership stake, and timeline have not yet been disclosed.
Recovery in financial performance of CMC,TV2’s 25%-stake associate which accounts for 50% of its total investment: As of end-2024, CMC reported a cumulative loss of VND240bn, with over 85% (approximately VND201bn) due to forex loss. However, CMC completed restructuring its USD-denominated loans into VND in April and targets a core profit of VND57bn in 2025 vs our forecast of VND72bn.
Capex plan of VND35.6bn (-23% YoY) & financial investment plan of VND9bn (-67% YoY): Management has not disclosed further details regarding its capex plan. However, regarding the financial investment, TV2 plans to continue disbursing for projects such as Tra Vinh Biomass (25MW) and Nui To I & II biomass power plants (2x30MW), as well as its new subsidiary - PECC2 Port Operation and Maintenance JSC (PPOM) with a 51% stake.
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