PVS – Opportunity when transitioning to offshore wind power
- Earnings growth in 2022 was mainly due to the low base of 2021. The overall business had no significant changes as the Mechanical & Construction (M&C) segment lacked huge contracts to be recorded and the gross margin of M&C continued to remain low at 1.4%. At the end of 2022, the revenue and NPATMI reached VND 16,419 bn (up 15.5% YoY) and VND 773 bn (up 28.5% YoY), respectively.
- PVS is gradually shifting its business to offshore wind power based on the its advantages of facilities as well as support from the Government. Recently, the company has been signing MOUs with many partners to cooperate in developing domestic as well as overseas projects. Up to now, PVS has been rewarded a USD 300mn - contract of 32 jackets offshore wind power project owned by Orsted Taiwan. PVS also won the package to implement two offshore substations of Hai Long project with the value of USD50 mn.
- Regarding the domestic Oil & Gas projects, we also expect that the speeding up of these progress will add more new backlogs in the short term as the company is gradually shifting to the renewable energy business segment.
- Despite the positive signals, PVS is still lacking huge EPC contracts to book for profit this year. For 2023, we forecast revenue and NPATMI to reach VND18,524 bn and VND 808 bn respectively, higher than our previous forecast (VND15,875bn and VND631bn). Therefore, we raise our target price from VND21,500 to VND23,800 but still stay NEUTRAL on this stock.
Petrovietnam Technical Services Corp. Petrovietnam Technical Services Corporation (PTSC) is a Vietnam-based provider of oil and gas related services and equipment industry. The Company provides petroleum storage services and marine transportation services using sea-borne tankers and specialized vessels. It is also involved in the provision of engineering services, geophysical surveying and mapping services and ship repair services. Moreover, it manufactures and installs tanks and gas pipelines. The Company also offers marine port services and offshore facility management and maintenance services. Other operations include the trading of petroleum and other petrochemicals. As of December 31, 2012, the Company was a subsidiary of Vietnam National Oil and Gas Group (Petrovietnam), and it had 13 subsidiaries, three joint ventures, five affiliates, along with six branches.
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