REE – AGM note: Flat earnings growth guidance reflects a mixed outlook for FY2023
We attend REE’s 2023 annual general meeting (AGM) in HCMC. Our key takeaways are as follows.
- Management guides for 2023 revenue of VND 10,962 bn/ USD 470mn (+17% YoY) and NPAT-MI of VND 2,700 bn/ USD 115 mn (+0.3% YoY). The 2023 profit plan is flat mainly due to the less positive growth prospect of the energy segment, while the residential real estate segment is expected to grow strongly (+539% YoY).
- REE expects the energy segment to contribute 50% to 2023 NPAT-MI, reaching VND 1,351 bn/ USD 58 mn (-19% YoY compared to a 2022 high base), mainly due to the hydropower sector's less optimistic outlook. In 2023, REE Energy also targets to develop an additional 100 MW capacity through M&A activities.
- Office leasing segment is projected to contribute 19% to 2023 NPT-MI, totaling VND 525 bn/ USD 22 mn (+2% YoY). The upcoming Etown 6 office building is also a driver in 2024, which will be launched in 4Q23.
- Real estate segment is expected to contribute 15% to 2023 NPAT-MI, amounting to VND 405 bn/ USD 17 mn (+539% YoY). REE Land targets to sell 100% low-rise housing products of Bo Xuyen project during the year.
- Water & Environmental services segment is forecasted to contribute 12% to 2023 NPAT- MI, recording VND 335 bn/ USD 14 mn (-1% YoY), demonstrating a stable performance.
- REE expects M&E services segment to contribute 6% to 2023 NPAT-MI, recording VND 160 bn (+20% YoY)/ USD 7 mn with flat gross margin. Public spending, FDI production expansion, and the recovery of the hospitality sector are the key drivers for this segment.
- Shareholders approved REE’s FY2022 dividend proposal for a 15% stock dividend and 10% cash dividend (equivalent to a 1.5% dividend yield).
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