O&G marine shipping segment in 2H2024 – “Keep up with good work”
• The oil and gas marine transportation market includes segments for the transportation of crude oil, oil products/chemicals, and LPG. Overall, charter rates for the oil and gas transportation sector increase from mid-2022 to mid-2023 and remain relatively stable throughout 2024 due to increasing demand for transportation while vessel supply remains limited.• In 2025, overcapacity due to the increase in vessel supply is forecast to pose a risk of a cooling in charter rates. However, rates may vary depending on the type and size of vessels. Currently, new orders are concentrated in medium (Aframax, MR) and large (LNG carriers) size vessels, with almost no orders for smaller vessels (13k dwt, 20k dwt, 3,500-5,000 cbm). Therefore, we believe that charter rates for smaller vessels may remain stable in 2025.
• For Vietnam's oil and gas marine transportation companies, particularly PVT and its subsidiaries (including PVP, GSP, and PDV), we expect NPAT to grow in 2H 2024 compared to 6M 2024, due to 1) active fleet expansion and 2) an increase in transportation trips for BSR. We forecast the following NPAT growth rates for 2H2024 as follow: PVT (+36% HoH, +47% YoY), PVP (+17% HoH, 48% YoY), PDV (+150% HoH, +352% YoY, boosted by ship liquidation proceeds in Q3 2024), GSP (+3% HoH, +53% YoY).
• FY2024 is a blooming year for Vietnam’s O&G marine transportation segment as most of companies are forecasted to achive impressive growth in NPAT, as detail: PVT (VND 1,224 bn, +26% YoY, corresponding EPS is VND 3,233), PVP (VND 228 bn, +24% YoY, corresponding EPS is VND 2,269), PDV (VND 196 bn, +206% YoY, corresponding EPS is VND 2,966), GSP (VND 120 bn, +41% YoY, corresponding EPS is VND 1,958). Using 5-yr average P/E at 9.5x, we recommend TP for PVT stock at VND 30,700/share, equivalent to a return of 11% at the closing price on Sep 19th 2024.
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