REE – Strong real estate sales to catapult 2024F earnings growth
- REE reported weak Q1 2024 results with revenue of VND 1,837 bn (-22% YoY) and NPAT-MI of VND 362 bn (-36% YoY). The power generation segment’s Q1 NPAT-MI slumped by 52% YoY to VND 238bn due to unfavorable weather conditions and lower participation in competitive generation market.
- We forecast 2024F revenue of VND 9,480 bn VND (+7% YoY) NPAT-MI of VND 2,411 bn (+10% YoY), which is mainly driven by strong results of real estate segment with 2024F revenue of VND 2,040bn (+95% YoY).
- Based on on the Sum of the Parts (SoTP) method, we value REE at VND 64,000/share based equivalent to a forward P/E of 12.5x and expected return of 1% based on the closing price on June 12th, 2024. We noted that REE share price increased 29% since our previous BUY recommendation on Feburary 16th. Looking forward to 2025, we expect REE to main growth as (1) Hydropower plants recover as La Nina returns and (2) higher occupancy rate of Etown 6 office building.
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