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- We cut our target price (TP) for TV2 by 45% to VND32,200 and downgrade our rating from BUY to MARKET PERFORM. Our lower TP is mainly driven by a 55% downward revision in our aggregate NPAT forecast (respective changes of -19%/-72%/-57%/-62%/-20% for 2024/25/26/27/28F) as we remove potential revenue from the Song Hau 2 project (SH2P) following its recent progress. These outweigh the positive impact of rolling our TP horizon forward to mid-2025 and incorporating a 10% stake in Nui To I biomass (30 MW).
- We forecast 2025F NPAT-MI of VND109bn (+59% YoY) driven by (1) expected doubling YoY revenue of EPC (Engineering, Procurement, & Construction) for renewables power projects with the recent launch of the Direct Power Purchase Agreement and nearly-secured revenue for Tra Vinh biomass, (2) 84% projected higher financial income with more dividend income from its past investments in solar & wind, and (3) a lower financial expense.
- We forecast revenue and NPAT-MI CAGRs of 22% and 27%, respectively, in 2024-2028F, driven by (1) a projected 41% CAGR of EPC revenue as we expect the new pricing mechanism for renewables power to be launched late this year, boosting investments in both solar & wind, (2) further growth in power consulting earnings with huge demand for transmissions infrastructure, (3) steady revenue growth of operation & maintenance (O&M) services from 2024’s high base (an additional 1,320 MW of Duyen Hai 2 power plant’s O&M) as we expect TV2 to sign O&M contracts for an additional 300 MW p.a. in 2025-2028F.
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