Analyst Pin-board PPC – Dividends from associates saved the business in 2021
- In 4Q2021, revenue/NPAT posted VND 539 bn (or USD 23 mn)/ VND 64 bn (or USD 2.8 mn), significantly lower than that in 2020. Operating profit was negative due to technical problems.
- In 2021, PPC faced both external and internal difficulties. Revenue and NPAT were VND 3,885 bn (or USD 169 mn) and VND 285 bn (or USD 12 mn), -51% YoY and 72% YoY. This is a record low earnings since 2015 even though the company recorded a high financial income of VND 452 bn (or USD 20 mn).
- In 2022, core business is expected to recover. Based on its contracted volume of roughly 3.2 bn kWh, we forecast revenue and NPAT to be VND 6,414 bn (or USD 279 mn) and VND 484 bn (USD 21 mn), +65% YoY and + 70% YoY, respectively.
- Potential growth for this stock in the medium term is limited because Pha Lai 3 plant will be constructed in the period from 2026 to 2030. Hence, cash dividends is the only catalyst to hold this stock. Our latest target price for PPC is VND 23,000. For the current target price with VND 500 dividend, implying a total return of 6% as of March 10th, 2022. We have a NEUTRAL
Pha Lai Thermal Power Joint Stock Company is a Vietnam-based electricity company. It is engaged in the operation, maintenance and management of the thermal power plant in Hai Duong Province for electricity generation and distribution. The Company also constructs power plants and transmission lines. In addition, it is involved in the trading of equipment and machinery used in the electricity sector, as well as the provision of repair and maintenance services. Other activities include the manufacture and trading of gypsum, clinker and concrete additives. The Company announces that Vietnam Electricity Group (EVN) has completed its divestment of 51% stake in the Company to Power Generation Corporation 2 (EVNGenco2) on November 7, 2013.
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