PC1 – Lay down the foundation for growth in 2023
- In 3Q2022, PC1 posted revenue and NPATMI of VND 3.006 bn (or USD 123.3 mn) and VND 66 bn (or USD 2.7 mn), -4% YoY and -54% YoY, respectively. For 9M2022, PC1 earned VND 262 bn (or USD 10.7 mn) in terms of net profit, -10% YoY. Per our estimation, revenue /NPATMI in 2022 will be VND 8,162 bn/201 bn (or USD 333/ 8.2 mn), -17%/-71% YoY, implying a loss in 4Q2022.
- Heavy FX loss in 2022 will lay the foundation for growth in 2023. Notably, most of the financial expenses in 2022 are unrealized losses while the power revenue stream is based on USD, hence part of those expenses will be compensated in coming years. Earnings in 2023 are forecasted to more than double that in 2022.
- Currently, PC1 is trading at 0.9x and 10.8x in terms of P/B and P/E, respectively, which is lower than that of 5-year average. Despite the risk of the interest rate hike and VND depreciation in 2023, we foresee the magnitude is lower than that in 2022. We revise down our target price for PC1 to VND 26.000 to reflect (1) the interest rate hike and (2) lower earnings in FY22 and FY23. In comparison to the closing price as of Nov 24th, 2022, this stock offers an upside of 63%, hence, investors can BUY and hold for the long run.
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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