GEG - Slight increase in profit creating a low base for 2021’s growth
We consider GEG as a renewable energy company with a strongly expanding portfolio diversified over all three segments, which are hydropower, solar power and wind power. As one of the largest beneficiaries of the renewable energy trend, GEG will operate three-wind power plants in 2020, a total capacity of 130 MW, increasing by 40% in capacity. Its 2021 electricity output is going to increase by 10%. Wind power will contribute 30% to GEG’s total revenue as its main growth driver in the medium term. Furthermore, hydropower’s prosperous phase will play in 2021, bringing high revenue and profit. Ultimately, solar power is expected to be fairly stable regardless of La Nina’s impact.
Now that information on GEG’s wind power farms have become more available, we adjusted our assumptions on the segment’s contribution to the forecasted business result. Accordingly, we raise our target price to VND 21,700 with an upside of 16% compared to the close price as of 10 March 2020. We recommend to ACCUMULATE this stock.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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