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GEG - Growth potential comes from expanding renewable energy capacity

Using a blended valuation approach combining Sum-of-the-Parts (SOTP) and EV/EBITDA multiple comparison at a 50:50 weighting, we estimate GEG’s fair value over the next 12 months at VND 19,600 per share, implying an upside potential of 36%. Accordingly, we maintain a BUY recommendation on GEG.
In 2025F, GEG’s key growth driver will come from the adjustment in wind power selling prices. We forecast revenue to reach VND 3,094 billion (+33% YoY) and net profit after tax – minority interest (NPAT-MI) at VND 590 billion (+413% YoY). Earnings growth will be primarily supported by: (1) Tan Phu Dong 1 wind farm receiving an official selling price, twice as high as the provisional rate; (2) one-off income from the price differential settlement of Tan Phu Dong 1; and (3) financial gains from the divestment of Truong Phu hydropower project.
For 2026F, GEG’s power output is expected to remain flat (-1% YoY), higher solar output (+8% YoY) but likely be offset by a 10% decline in hydropower generation following the La Niña cycle. As a result, revenue is projected to fall 11% YoY to VND 2.8 trillion, and NPAT-MI to decline 71% YoY to VND 173 billion, mainly due to the absence of non-recurring gains recorded in 2025F.
Capacity expansion with new project development. During 2025–2029F, GEG plans to develop four new power plants, adding a total of 179 MW to its installed capacity — the key driver for long-term revenue growth. To finance these projects, the company is expected to raise approximately VND 4.9 trillion in new borrowings, which will add pressure to financial expenses in the short term.
Overall, we expect 2025–2027 to mark the beginning of a new capacity expansion cycle, supporting both revenue and output growth for GEG. However, net profit margins will likely remain subdued due to higher interest expenses. From 2028 onward, as Tan Thanh Wind Farm comes online, GEG’s net margin is expected to improve gradually.
Risks
• Unexpected changes in power purchase pricing policies could have negative affect the company’s profitability.
• High leverage level in the short to medium term makes the company vulnerable to interest rate fluctuations.