| Title | X-Alpha | POW 18,500 +26%: El Niño boosts thermal power, driving surging profits |
|---|---|
| Report Type | Phân tích công ty |
| Source | BSC |
| Industry | Oil & Gas |
| Bussiness | POW |
| Detail |
Date : 07/09/2026 Total pages : 0 Language : English File Type : .PDF FileSize : 551 Kb Download: 0 Download |
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| Short Content |
VALUATION VIEW BSC maintains a BUY recommendation on POW with a target price of VND 18,500/share, implying 25% upside from the closing price on July 6, 2026, based on the discounted cash flow method. We raise our target price by 8% compared with our latest report, mainly due to a 118% upward revision to our 2026 NPAT-MI forecast. EARNINGS FORECAST BSC forecasts POW’s 2026 net revenue and NPAT-MI at VND 58,729bn (+57% YoY) and VND 5,854bn (+150% YoY), respectively, equivalent to EPS of VND 1,908/share, a 2026F forward P/E of 7.7x and a 2026F forward EV/EBITDA of 5.8x. Compared with our latest report, our revenue and net profit forecasts are revised upward by 16% and 117%, respectively, mainly due to: (i) The inclusion of a one-off FX compensation of approximately VND 1,600bn from EVN, accounting for 51% of the change in our earnings forecast; (ii) A 7.4% upward revision to commercial electricity output to 23,608mn kWh, driven by higher generation forecasts for Vung Ang 1 (+25%) and Nhon Trach 1 (+8%); and (iii) A 5% increase in the estimated average selling price, mainly due to a 33% upward revision to our competitive generation market (CGM) price assumption. COMPANY UPDATE 2026 AGM update
Investment view update We maintain our positive view on POW, in line with our latest update, based on two key investment highlights: (i) Solid long-term growth supported by macro policy: System load is expected to remain high, while supportive policies for gas-fired power development provide substantial valuation potential for the Nhon Trach 3 & 4 complex; and (ii) Short-term recovery catalysts from cash flow and weather conditions: A prolonged El Niño cycle is expected to support maximum thermal power dispatch and lift our CGM price forecast to VND 1,260/kWh. Meanwhile, cash flow should be strengthened by the recognition of a one-off FX compensation of VND 1,600bn from EVN. RISKS (1) Commercial electricity output and the actual contracted output (Qc) ratio come in below expectations; (2) Higher financial and interest expenses at Nhon Trach 3 & 4; and (3) Volatility in input fuel prices (LNG and coal) and unfavorable weather conditions, particularly La Niña, which could limit thermal power dispatch. |