PC1- Robust power construction activities
We appreciate PC1’s efforts to operate three distinctive business while maintaining the overall efficiency. Its power construction business still has ample room to grow owing to EVN’s demand on new electricity infrastructure. This also provides opportunities to its steel structure manufacturing business. Regarding PC1’s hydropower business, we think its stability will stand out as a major contributor of earnings to PC1. In fact, PC1’s electricity portfolio, including two HPPs under construction and five other initiated projects, contributes the largest proportion in our PC1’s sum-of-the-parts valuation. Last but not least, we appreciate PC1’s ability to obtain prime-location land banks and its residential projects’ profitability, which can act as a surprise factor to the company’s earnings. Our SOTP valuation determines PC1’s fair price at VND 32,100 per share, higher than that in our 2019 Strategy Report mostly due to newly added HPP projects. It implies a 39% upside as of the closing price on June 12th, 2019 as 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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