PC1 - Growing into an electricity company
We maintain our overall view on PC1, a company operating three distinctive businesses efficiently. Even though short-term difficulties might affect business results, its long-term potential stays solid. PC1 is going to benefit from the growing investment into the power industry from both the public and private sectors as a leading general contractor for electricity generation and transmission projects. Additionally, as an investor itself, PC1 will take advantage of the subsidy for wind power. We expect PC1’s hydropower portfolio to bounce back from severe drought in the near future after the poor performance in 1Q2020. The “one-off” income from its real estate business is going to cushion’s 2020 profit. Our SOTP valuation comes to PC1’s fair price at VND 29,900 per share, higher than that in our 2020 Strategy Report mostly due to the newly added wind power project. It implies a strong upside of 74% as of the closing price on June 19h, 2020 and we recommend to BUY the 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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