REE – Favorable conditions boosted earnings in 3Q2022
- The company posted revenue and NPATMI of VND 2,234 bn (or USD 91 mn) and VND 680 bn (or USD 28 mn).The gross profit margin expanded to 41% in 3Q2022 from 32% in 3Q2021, driven mainly by the power sector. Power plant earnings have tripled compared to that in 2021, contributing 55% of total NPAT. Office leasing/ M&E services and the trading sector have doubled/tenfold compared to last year, contributing 26% and 6% to total NPAT. The water segment sustainably rose by 10%, accounting for 13% NPAT.
- In 2022, we forecast revenue and NPATMI to be VND 8,486 bn (or USD 346 mn) and VND 2,678 bn (or USD 109 mn), +46% YoY and +44% YoY, respectively. REE has outperformed during 2022 thanks to (1) Favorable conditions boosting hydropower results; (2) New contribution of the three wind power plants; (3) The recovery of remaining segment compared to 2021. We forecast revenue and NPAT in 2023 to be VND 8,237 bn (or USD 336 mn) and VND 2,581 (or USD 105 mn), -4% YoY and -3% YoY, respectively.
- We revise down our target price to VND 79,000 to reflect (1) higher WACC and (2) higher interest rates in the context of a risk-free rate surge. Comprising of VND 1,000 dividends in the next 12 months, offering an upside of 16% compared to the closing price as of Aug 11th, 2022. Hence, we recommend to ACCUMULATE this stock
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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