PC1- Electricity will offset the real estate segment in 2021
PC1 is transforming itself into an electricity generation company with expanding capacity in recent years. Being able to construct the power plants itself, the company can have speedy construction progress and CAPEX efficiency. This year, the company is going to begin the 144 MW wind power capacity, which is PC1’s growth engine for the long-term. Furthermore, PC1 will also benefit from the wind power market this year as a contractor. While 2021 is an off-peak year for the real estate segment, the recovery in its hydropower business can compensate for that. We expect that the real estate segment will start contributing in mid 2022 with two projects under development.
Using P/E and sum of the parts methods, we determine the fair value of PC1 at VND 32,200 per share, offering a 16% upside from the closing price on March 26th, 2021. This price is adjusted upward from the most recent update because we fine-tuned our earnings forecast and raised valuation multiples. We recommend to ACCUMULATE this stock.
Power Construction Joint Stock Company No 1 (PCC 1) is a Vietnam-based company primarily engaged in power transmission structures construction. Its leading business activities include the construction of electric power transmission lines, towers, and hydro power generation plants; the manufacture of galvanized structural steels; the mining of iron ores, and the wholesale of construction materials. The Company, via its subsidiaries, is also involved in the development of residential and commercial properties, the manufacture of motorized vehicles, as well as the operation of storage and warehousing facilitites.
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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