POWER SECTOR

OUTLOOK 2H.2021
 QUICK LOOK ON 1H.2021

Demand recovered Power consumption, IIP and GDP

15%
 According to GSO and EVN, 2nd quarter’s GDP increased 6,61% yoy. IIP
increased of 8,9% yoy in 1H.2021 help power consumption increased 7,93% yoy. 10%
 In particular, in the hot days of early June, the consumption capacity reached a
5%
historic peak with more than 41 MW of the total 63MW of maximum installed
capacity of the power source. 0%

USD/mt Coal and Natural gas price 2017 - 2021 USD/mm Energy Production IIP GDP
140 8 Source: Fiinpro, EVN, VCBS
120
100 6 Coal and gas input prices increased sharply in the first half of 2021.
80  Coal prices from Australia have increased by nearly 30% since the beginning of the year
4 from 83 USD/ton to 107.04 USD/ton by the end of May 2021. The domestic price of coal
60
40 supplied to thermal power plants is subsidized, so it does not fluctuate much => affecting
2 thermal power plants using imported coal.
20
0 0  Gas prices in the world increased by 17% compared to the beginning of the year and
increased by 61% yoy.
Jan-18

Jan-19

Jan-20

Jan-21
Jul-17
Oct-17

Jul-18
Oct-18

Jul-19
Oct-19

Jul-20
Oct-20
Apr-18
Apr-17

Apr-19

Apr-20

Apr-21

 Gas prices for Phu My Thermal Power Plant increased by 30% compared to the beginning
of the year and increased by 25.5% YoY due to higher prices for exploitation and
Australia coal Natural gas Phu My Natural gas input transportation of SV - DN field compared to old fields. Gas selling price double world
price due to well-mouth selling mechanism (higher investment share).
Source: EIA, Nasdaq, PGV
VND Average FMP
1,500

Full market price in competitive market are higher than the same period in March, 1,000
April, and June and may be higher in the remaining months as input prices such as
coal and gas increase despite the high output of hydropower. 500

0
1 2 3 4 5 6 7 8 9 10 11 12
2021 2020 2019
Source: EVNGENCO 3, VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 2 Back
QUICK LOOK ON 1H.2021

Hydropower production increased sharply due to higher water storage from the previous year.

Hydropower output reached 30.46 billion kWh (+41.3% yoy) in 1H.2021 . La Nina from the middle of last year and peaked in October 2020 helps large lakes to
store a significant amount of water to maintain operation in the first 6 months of the dry season in early 2021. However, in the north, large hydroelectric dams
such as Son La , Hoa Binh, especially Ban Chat, is having a lower water level than last year cause of hot season and storms comes late than last year.
Renewable capacity surged in 2020 due to Solar Power
Power production

Renewable energy capacity reached 17.4 GW, an increase of more than 3 times compare to 2019, (Unit: billion kWh)
accounting for 25% of total power capacity. Output in 1H.2021 reached 14.69 billion kWh
(+171.5% yoy), accounting for 11.4% of the power structure, almost equivalent to gas thermal
power. The significant increase in capacity of solar power has led to excess power during the 6T.2020
afternoon off-peak hours, causing thermal power plants to deflate and run at minimum capacity.
Thermal power mobilization decreased due to a sharp increase in hydropower, renewable energy
output and reduced contract output 6T.2021

 Coal-fired thermal power was still the main source of electricity with an output of 66.67 billion
kWh (-4.4% yoy) in the first half of the year, accounting for 51.9% of total electricity production - 20.0 40.0 60.0 80.0 100.0 120.0 140.0

(high proportion due to seasonal factors). Hydropower Coal - fired power Gas power
 Gas thermal power reached 15.66 billion kWh (-22.8% yoy). In the dry season this year, there is no Renewable Import
longer the pressure of gas shortage because there is an SV-DN field that has brought gas to the
shore, but the price of the wellhead is 20-30% higher than the old fields. Total power capacity
m 80,000
15 Water level compare to last period
10 70,000
60,000
5
50,000
0
40,000
-5
30,000
-10
20,000
-15
10,000
-20
-
A Vương
Sông Tranh 2
Bản Vẽ

Đơn Dương
Kanak

Sê San 3A
Lai Châu
Thác Bà
Bản Chát

Sông Ba Hạ

Sê San 4A
Huội Quảng

Buôn Tua Srah

Đại Ninh
Khe Bố

Đa Mi
Sơn La
Hòa Bình

A Lưới
Trung Sơn

Vĩnh Sơn A

An Khê

Pleikrông
Ialy

Sê San 3

Sê San 4
Quảng Trị

Vĩnh Sơn B
Vĩnh Sơn C

Srepok 3

Đồng Nai 3

Hàm Thuận

Đồng Nai 4
Sông Hinh
Sông Bung 2
Sông Bung 4

Buôn Kuop

2016 2017 2018 2019 2020

Hydropower Coal-fired Gas-fired Renewable Import
Source: EVN,
Source: EVN, VCBS
KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 3 Back
QUICK LOOK ON 1H.2021
Wind power projects are on the race to be complete before 1/11/2021.
 According to EVN, 5,6 GW in total capacity will operate before Nov 1st ,2021 to meet deadline of FIT. There fore, total
Renewable capacity up to 24.000 MW, account for 30 – 32% total power resource in Vietnam.
 About 13 project named in PDP 7 expand but not expected to be on schedule and haven’t sign PPA yet.
Some listed companies developing wind power project:

Investment/M
Capacity Value
Company Project name W Type Status Location Note
(MW) (VND bil)
(VND bil/MW)
Installed 80% turbine,
Lien Lap 48 1921 40.0 Onshore Quang Tri Own 55%
COD on Aug
PC1
Phong Huy 48 1921 40.0 Onshore COD on Oct Quang Tri Own 55%
Phong Nguyen 48 1921 40.0 Onshore COD on Oct Quang Tri Own 55%
Tan Phu Dong 2 50 2242 44.8 Offshore COD on Oct (75%) Tien Giang
GEG Ia Bang 1 50 1790 35.8 Onshore COD on Oct Gia Lai
VPL 30 1448 48.3 Offshore COD on Oct Ben Tre
100% foundation, COD
Loi Hai 2 28.9 987 34.2 Onshore Ninh Thuan
on Oct
REE
V1-3 Tra Vinh 48 2010 41.9 Offshore COD on Oct Tra Vinh
Phu Lac 2 25.2 860 34.1 Onshore COD on Oct Binh Thuan
VNE Thuan Nhien Phong 1 32 1203 37.6 Onshore COD on Oct Binh Thuan
HDG 7A Thuan Nam 50 1710 34.2 Onshore COD on Oct
TTA Phuong Mai 1 30 1076 35.9 Onshore COD on Aug Binh Dinh Own 25%

TV2 Tan Thuan Dong 75 3600 48.0 Offshore Installed 4/18 turbine Ca Mau Own 25%
Gelex 1,2,3 90 4057 45.1 Onshore COD on Aug - Sep Quang Tri
GEX
Huong Phung 2, 3 50 2196 43.9 Onshore COD on Aug – Sep Quang Tri
SCI Huong Linh 8 25.2 975 38.7 Onshore COD on Oct Quang Tri Own 20%
S99 Huong Linh 8 25.2 975 38.7 Onshore COD on Oct Quang Tri Own 80%
HID Phuong Mai 3 21 51% Onshore COD on Mar 2020 Binh Dinh Own 51%
Source: VCBS
KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 4 Back
1H.2021 PERFORMANCE

Almost hydropower companies had a better performance in 1H.2021 due to La Nina from 2H.2020. Revenue increased 20% - 90% YoY.
 Power company usually have high DOL, that why revenue increase help NPAT surge significantly. According our data, NPAT rose by 27% to
240% such as: S4A with Revenue increased by 27%, NPAT surge 240%. Or DNH (one of the biggest capacity hydropower company with 735
MW) increased 68,5% of Revenue and 143% of NPAT in 1H.2021.
Thermal power companies declined Revenue and NPAT but QTP.
 Total revenue of thermal power enterprises according to our statistics decreased by 25% over the same period, of which the biggest decline was
PPC because Pha Lai 1 plant was old, high operating costs and little mobilized, making the company's business less profitable. Revenue
decreased by 48%, GPM reached -46 billion dong, NPAT decreased by 37%, although it was offset by high financial revenue. The other
companies all saw a decrease in revenue of 10% - 25% and a very considerably drop in NPAT, up to 45% - 76%.
 Only QTP, although revenue decreased by 15%, but NPAT was 15 times the same period of the same period, mainly drive by the company
extended amortization in 2020 and reduced interest expenses due to lower debt.
Renewable power companies:
 Currently, there are very few RE companies listed, only a few companies that have other activities and develop more RE segments such as: ASM,
HDG, LCG, GEG, TTA all show quite stable revenue from RE due to reduced pressure of cutting capacity.
Hydropower
Thermal power
1200
7000
1000
6000
800 5000
600 4000
3000
400
2000
200 1000
0 0
TBC CHP HNA S4A SBA DNH ISH PPC HND QTP NT2
-200
Sales 1H.2021 Sales 1H.2020 NPAT 1H.2021 NPAT 1H.2020 Sales 1H.2021 Sales 1H.2020 NPAT 1H.2021 NPAT 1H.2020

Source: VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 5 Back
OUTLOOK 2H.2021 – HYDRO POWER AND THERMAL POWER

La Nina continue support hydropower to have better performance in 2H.2021. Sea surface temperature
According to the forecast of the International Research Institute for Climate and
Societyr of Columbia University (IRI), the probability of La Nina occurring from
September to November has reached about 62% - 69%. The sea surface temperature
of the Western Pacific Ocean is currently about 1 - 2oC higher than average, when
the East wind and the East - South wind are active, it will trigger the activity of
tropical cyclones, meeting the high sea surface temperature will become tropical
depressions and storms. In the middle of July, there was continuous rain in China,
Japan and especially Zhengzhou with a rainfall of nearly 600 mm/day, nearly equal
to the annual rainfall.
For Vietnam, La Nina is forecast to bring nearly the same amount of rain as in 2020
and start heavy rain from August with tropical depressions/storms focusing on the
North, North Central and gradually move into Central and South Central Coast in
September and October.
Therefore, hydropower plants in the North and North Central region will likely Source: tropicaltidbit.com
continue to have high water level to maintain operation until next year's dry season.
El nino, La Nina probability
Hydropower in the Central Highlands and Southeast will also have a better year as
80%
this year rains earlier than the same period.
Thermal power companies: Thermal power partially recovers in June and July due to 60%
increased electricity demand, especially in hot days and La Nina will occur later than 40%
last year. However, this is still not a good year for thermal power companies, especially
gas thermal power plants in the South with rising input prices and low Qc output, low 20%
market prices and falling demand due to the lockdown by Covid-19. The main bright
0%
spot is in some businesses that have stories of ending depreciation period, reducing JJA JAS ASO SON OND NDJ DJF JFM FMA
financial expense (FX, interest) such as PGV, QTP...
La Niña Neutral El Niño

Source: IRI (Columbia University), VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 6 Back
OUTLOOK 2H.2021 – RENEWABLE

Investment costs are still in a long-term downward trend, although they have increased Installation cost
8,000
in the 1H.2021, LCOE (levelized cost of energy: average cost of energy) onshore wind
6,000
power has been lower than solar PV..
4,000
The sharp increase in demand for renewable energy investment in the world has boosted production,
2,000
improved technology and increased economies of scale, helping to decrease investment costs of RE and
-
able to compete with other forms of energy. 2010 2012 2014 2016 2018 2020
In particular, the average investment cost for PV solar power has been the largest decreases from more On-shore Windpower Solar PV
Hydropower Off-shore Windpower
than 4,700 USD/kW to just over 800 USD/kW (a decrease of more than 80%) to be the lowest
Source: IRENA, VCBS
investment per kW from 2010 to 2020. This is due to a sharp increase in the consumption market,
companies ramping up production to reduce costs, and the average efficiency of PV modules also Capacity factor
60%
increases from about 10% to 16% -18% in 2020, especially is the highest conversion has reached
50%
25.25% in early 2021.
40%
Offshore and onshore wind power also had a significant reduction in investment costs with 31.5% and 30%
30.5% respectively in the period 2010-2020. At the same time, efficiency also improved quite a bit. from 20%
38% to 40-45%, respectively and especially onshore wind power from an average of 27% to 36% thanks 10%
2010 2012 2014 2016 2018 2020
to improved technology. Rotor can operate in a wider wind speed frame, greatly increasing the capacity On-shore Windpower Solar PV
of 1 turbine beside creasing blade length and hub height. Hydropower Off-shore Windpower
Source: IRENA, VCBS
According to IRENA data, the LCOE fell the most for solar power, from 37.8 cents/kWh to 5.7
LOCE
cents/kWh at the end of 2020 (down 85%). The LCOE of onshore wind was lower than that of 0.4
hydropower in 2021 with 3.9 cents/kWh compared to 4.4 cents/kWh. The LCOE of offshore wind is still 0.3
high but also significantly reduced to 8.4 cents/kWh in 2020 (decreased 48%). The reducing of LCOE 0.2
mainly come from decrease investment costs, O&M costs and increasing efficiency. 0.1
0
2010 2012 2014 2016 2018 2020
On-shore Windpower Solar PV

Hydropower Off-shore Windpower

Source: IRENA, VCBS
KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 7 Back
OUTLOOK 2H.2021 – RENEWABLE ENERGY

FIT price expired last year and waiting for auction market to continue developing.
Grid line improved help Solar power projects increase electricity transfer and revenue also.
The additional capacity of the Solar PV segment will depend entirely on the electricity price policy in the near future, and may be subject
to the bidding mechanism. However, it will take a longer time to avoid oversupply, causing imbalance in power sources. Given the short-
term oversupply, we estimate that at least until the end of 2022, no more solar projects will be developed.

Wind power racing to meet the deadline of FIT, increasing 6.000 MW of capacity and account for closely 10% total power capacity in
this year.
According to FIT mechanism, IRR for each wind power project must be reach 15% - 18% if EVN buy all output, a very attractive IRR

Attractive selling price for Biomass Energy with 8.47 and 7.03 cent/kWh
for not cogeneration and cogeneration respectively. Capacity factor
It consist to Mekong Delta due to availability of resource

PDP 8 fail to submit to government in June. PDP 8 helps to shape the structure of different types
of power sources, planning power projects according to advantages and benefits in investment as
well as electricity consumption. The early approval of PHD 8 will help projects that have not been
in PDP 7 is speeding up the process of completing investment documents, especially the area of
interest and accounting for a high proportion of the power source structure in PDP 8 such as
Renewable Energy when many projects are in the process of completing investment procedures
KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 8 Back
OUTLOOK 2H.2021 – RENEWABLE ENERGY

FIT price expired last year and waiting for auction market to continue developing.
Grid line improved help Solar power projects increase electricity transfer and revenue also.
The additional capacity of the Solar PV segment will depend entirely on the electricity price policy in the near future, and may be subject
to the bidding mechanism. However, it will take a longer time to avoid oversupply, causing imbalance in power sources. Given the short-
term oversupply, we estimate that at least until the end of 2022, no more solar projects will be developed.

Wind power racing to meet the deadline of FIT, increasing 6.000 MW of capacity and account for closely 10% total power capacity in
this year.
According to FIT mechanism, IRR for each wind power project must be reach 15% - 18% if EVN buy all output, a very attractive IRR

FIT1 prices for wind power are at 9.8 cents/kWh and 8.5 cents/kWh for offshore and
onshore, respectively. The MoIT has proposed to government to extend the FIT price for
another 02 years to 2023 due to the possibility that many wind power projects may not be Current wind power FIT and expected price
able to operate on time this year while the reserve ratio for power supply is under 20% in 2022 - 2023
(excluding solar power, onshore wind power) in the peak season, there will be a risk of 12
power shortage when not all plants can run at full capacity. In addition, the investment time 9.8
10
of a wind power project is up to 2-4 years, so it will cause difficulties for many projects. 8.5 8.47 8.21
8

Uscent/kWh
Offshore projects in about 30 - 50m deep will be very important with a high capacity ratio 7.02 6.81
(40% - 60%) due to the constant wind blowing will increase reserve ratio, which needs more 6
attention in planning to replace environmental pollution source, especially coal-fired power.
4

0
FIT1 2021-2022 2022-2023
Onshore Offshore
Source: MoIT, VCBS

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OUTLOOK 2H.2021 – 8TH POWER MASTER PLAN
MW Power capacity base on resource 2020 - 2045
RENEWABLE ENERGY AND LNG THERMAL POWER IS PRIORITY (base scenario)
RENEWABLE ENERGY 300,000

Power source structure: Renewable energy excluding hydropower will account for the 250,000
majority of the power source structure in 2045 with 115.7 GW (42% of the total capacity). 200,000
Wind power will accounts for 22% of total source capacity with more than 60 GW in
150,000
2045. In which, onshore wind power reaches more than 39.6 GW and offshore wind
power accounts for only 21 GW while this is a stable source that can be replace thermal 100,000

or hydropower sources. We see here that only 2 GW of offshore wind power will appear 50,000
in 2030, which is quite inadequate because currently a number of offshore wind power
0
projects are surveying and applying for permits such as: La Gan wind power with total 2020 2025 2030 2035 2040 2045
capacity of 3.5 GW (completed survey procedures), Thang Long Wind 3.4 GW, offshore Coal fired thermal Gas fired thermal Hydropower
BR - VT with 500 MW, offshore wind power Hai Phong is conducting initial Wind Solar PV Others
procedures.. Import

Although Solar PV in 2020 has reached more than 17 GW of capacity, the plan to 2025
Capacity Operation year
is only 17.24 GW, 18.64 GW in 2030 is quite low. There will be no further development Hydropower project
(MW) (estimated)
while prices are trending down until 2030. We believe that, with the next draft, the
capacity of solar PV will increase and the government will adopt an auction mechanism Hoa Binh expand 480 2023
for solar PV to get the most suitable price. Yaly expand 360 2024
Other types of renewable energy such as Biomass, Garbage power.. will still be focused. Đăk Mi 2 147 2021
However, it is lack of capacity due to many limitations in materials, technology, etc. Thuong Kon Tum 220 2021
Tri An expand 200 2025
Hydropower has almost reached its technical potential, so only a few projects already My Ly 95 N/A
included in the PDP 7 expandsion have been implemented and then hardly developed Nam Mo 1 180 N/A
any further. Others 1208 N/A

Total 2890

Source: PDP 8 draft, VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 10 Back
 OUTLOOK 2H.2021 – RENEWABLE ENERGY

THERMAL POWER (COAL – FIRED AND GAS - FIRED)

MW Total power resource in draft
80000 PDP 8
Thermal power still be the most important source in the power structure, especially for the safety of the power
grid when it can be actively mobilized when necessary to increase the stability of the power source (gas–fired
thermal power). Currently, thermal power is the main source of background running. This will be the main 60000
backup source in the future. Therefore, in the draft PDP 8 still uphold this role and increase the capacity of
thermal power sources in parallel with renewable energy sources. 40000
Coal-fired thermal power: Coal-fired power is still the most important source of Vietnam with an
average annual output of more than 50%. This is still a major source with the ability to supply domestic 20000
coal about 35-40 million tons/year (accounting for 40% - 45% demand) and the rest is imported.
Imported coal is quite abundant from Indonesia, Australia, South Africa or Russia. According to IEA,
0
the current coal reserves in the world can be more than 130 years with current exploitation. Coal power 2020 2025 2030 2035 2040 2045
capacity according to the Draft PDP 8 has a CAGR of 3.5%/year in the period of 2020 - 2045 (capacity Coal fired thermal Gas fired thermal Hydropower
in 2045 will reach 49,918 MW with the importance of coal thermal power, so it still needs to continue Wind Solar PV Others
to grow, however, will use the latest technologies to avoid emitting a lot of greenhouse gases because Import Source: EVN, VCBS
in the future there may be a Carbon tax when using electricity from coal thermal power plants..
Gas-fired thermal power: The fuel for gas thermal power plants also faces the same problem of
supply reduction as coal and is somewhat more severe. However, this is also an extremely important Annual natural gas supply (base case - include Ca
source in the power system with the characteristics of fast and stable mobilization. With the forecast of Voi Xanh and Plot B)
a decrease in gas sources, PDP 8 switched to using imported LNG with new plants using LNG such as 16
Nhon Trach 3 & 4, Son My gas power center, Ca Na, Bac Lieu, Long An.... Accordingly, in 2045, gas- 14
fired power will have the highest capacity with 66,504 MW. However, this is a high-priced fuel source, 12

Million m3
requiring special equipment, gasification centers, and storage facilities, which will increase the cost of 10
electricity production in the future. 8
6
4
2
0

Central Southeast Southwest

Source: EVN, VCBS

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OUTLOOK 2H.2021
In outlook of second haft, We believe that the prospect of power enterprises has the following characteristics:
 Companies developing wind power projects can operate before November 1, 2021 and are located in areas with good
transmission network, without capacity reduction after operating.
 EPC Constructor of power transmission networks, especially for wind power.
 Companies providing power plant operation and management services.
Some notable listed company:
Capitalized Dividend
# Sticker P/E P/B EV/EBITDA Segments
(VND billion) yield

1 POW 28.337 12,54 0,98 6,01 2,50% Thermal power, hydro power
2 REE 17.801 10,06 1,50 13,90 5,33% Hydro power, wind power, thermal
3 HND 8.983 7,24 1,37 3,41 7,94% Coal – fired thermal power
4 HDG 6.726 6,07 2,01 5,83 0,00% Hydro power, wind power, solar PV
5 NT2 6.031 10,75 1,46 4,64 12,50% Gas fired thermal power
6 VSH 5.150 16,04 1,38 32,53 0,00% Hydro power
Hydro power, wind power, EPC
7 PC1 5.057 10,27 1,25 8,77 0,00% constructor
8 GEG 4.637 16,17 1,51 8,87 0,00% Hydropower, wind power, Solar PV
Consulting, EPC, Solar PV, Wind
9 TV2 2.096 8,88 1,75 7,27 0,00% power, Biomass power
10 TTA 2.005 13,86 1,19 9,64 0,00% Hydropower, solar PV, wind power
EPC contractor, Wind power,
11 S99 1.070 6,21 1,22 4,69 0,00% hydropower
Source: VCBS
Base on prospective above, we choose TV2, PC1 and REE with on schedule wind project and high revenue from wind
EPC contractor in this year.
KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 12 Back
 PC1 – Summary
PC1’s business
Revenue structure
Shareholder structure
Revenue of EPC contractor account for 46% - the biggest segment, Inside: 2019
Outside: 2020
followed by commercial with 18% and Real estate, Industrial production Construction
20.03 Trinh Van 1%
% Tuan 17%
and Power with 13%, 12% and 11% respectively. Although the portion 17%
2% Industrial
HEHS production
of Power’s revenue is only 11%, the GP account for 38.5% (the highest) Real Estate
17.76 11%9% 46%
followed by EPC contractor with 28% and Real estate (23%) and will be 54.34
% Vietnam 51% Power
% Holding 4%
increase up to more than 70% in 2022. Ltd Commercial
4.14% Nguyen 13% 17%
Shareholder structure Nhat Tan
Others
12%
Chairman an his family account for 20.03% followed by BEHS with
17.76%, Vietnam Holding Ltd hold 4,14% and the others Source: PC1, VCBS, fiinpro

1H.2021 performance VND Bil

Business performance
8,000 25.0%
Revenue reached VND 4,540 billion (+78.7% yoy, reaching 65% of the
7,000
year plan), mainly due to 262% yoy increase in construction activities 20% 20.0%
6,000
and 293% increase in sales (mainly iron ore) and energy by 7%. In 17.0% 17%
5,000 15.0%
contrast, industrial production activities dropped sharply with -64% yoy 14%
4,000
and real estate with high GPM decreased by 86% yoy due to the 10.0%
3,000 10%
completion of the project handover. Consolidated EAT reached
2,000
VND208.9 billion (-2.2% yoy), reaching 44.5% of the year plan. 5.0%
1,000 467 358 513 209 214
According to our estimates, EPC construction and wind power operating
- 0.0%
from August to October will offset the lack of revenue of Real Estate. 2018 2019 2020 6T.2021 6T.2020
Revenue in 2021 is estimated at 7,590 billion VND (+13.64% yoy). Total Revenue Gross profits
Profit after Tax Gross Profit margin
Source: PC1, VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 13 Back
 Power Construction No.1 – PC1
VND billion
CATALYST Revenue and backlog value
5,000
4,500
 03 wind project progress (144MW) on schedule. Lien Lap will COD on 4,000
this August. Phong Huy and Phong Nguyen will COD on October.2021 3,500
3,000
help double power revenue in 2022. On the other hand, PC1 continue 2,500
develop others wind power themselves in the future (100MW). 2,000
1,500
1,000
 Construction, industrial production: Sign huge EPC contracts in 500
2020 and 1Q.2021 (mostly wind project and wind transmission grid) 0
2018 2019 2020 2021F 2022F
(+50% yoy) and more than VND 1.000 billion in 2Q.2021. Potential long Construction backlog Construction revenue
term growth due to expected expand FIT for wind power and demand
Source: PC1, VCBS
recovery.

 The hydropower segment continues to have high growth this year as VND billion
Revenue
new plants and La Nina are still present in the rainy season this year; 5,000 60%
Continue developing new 02 small hydropower project. 40%
4,000
20%
 Real Estate: PCC1 Vinh Hung and Thang Long will contribute Revenue 3,000 0%
-20%
at least from 2023. PC1 tend to develop 500 ha industrial park and 2,000 -40%
residential 1,000
-60%
-80%
RISK - -100%
 Weather effect to power generation
 Bad debt from construction
 Wind progress not meet the deadline 2020 KH 2021 Growth
Source: PC1, VCBS

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 Logo
DN PC1 – OUTPERFORM
VALUATION TARGET PRICE

SOTP METHOD VND 33.700 33.700

OUTPERFORM +5.2%

Price relative to Index

ESTIMATE
32,000

29,000 Unit: VND billion 2020 2021F 2022F

26,000

23,000 Revenue 6,679 7,590 6,949

20,000
+/- yoy (%) 14.26% 13.64% -8.45%
17,000

14,000 NPAT 363 515 660

11,000

+/- % 43.33% 41.96% 28.12%

PC1 Relative VNINDEX EPS 2,682 2,694 3,452

Source: VCBS estimated

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 15 Back
 REE – SUMMARY
REE’s Business
Shareholder structure Revenue structure
M&E and Reetech account for 62% of total revenue in 2020, Platinum Insdie: 2019
Victory Outside: 2020
followed by Utilities and Office leasing with 21% and 17%, M&E +
Nguyen REEtech
respectively. However, the office leasing segment accounted for the Mai Real
largest share of Gross profit with 43%, M&E with 30%, the rest was Thanh and
family
Estate
Apollo
electricity and water. In addition, the company also invested quite a Asia Fund Utilities

lot in joint ventures and associations with companies in the fields of

HIFC
hydroelectricity, thermal power, water supply.
Shareholder structure Source: REE, VCBS

The main shareholders are Platinum Victory with 30.81%, followed

by Mrs. Nguyen Mai Thanh's family with 18.99%, Apollo Asia Fund
VND Bil
Business performance
(5.89%) and HIFC (5.3%)… 6,000 45.0%
39.0% 40.0%
1H.2021 performance 5,000
35.0%
• Revenue reached VND 2822 billion (+14% yoy, reaching 40.7% 4,000
28.5% 29.3% 30.0%
25% 25.0%
of year plan), EAT reached VND 799 billion (+26.8% yoy, 3,000 24.1%
20.0%
reaching 45% year plan) mainly due to consolidation of VSH 2,000
1,784 1,639 1,628 15.0%
together with large volume of water and 86 MWp of rooftop Solar 799 630
10.0%
1,000
5.0%
PV operated from the end of 2020. Office leasing activity was the
- 0.0%
same as last period, while other segments all declined due to the 2018 2019 2020 1H.2021 1H.2020
impact by Covid 19. Total Revenue Gross profits
Profit after Tax Gross Profit margin
• Gross profit margin increased sharply to 39% (up 10% over the
Source: REE, VCBS
same period)
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 REE CORPORATION – REE
CATALYST

Consolidating VSH after the Thuong Kon Tum
project has operated all 2 units and is renegotiating a
new PPA. If successful, it is expected to increase
NPAT by VND 50 billion in 2021 and 170-180
billion dong in 2022
03 wind power projects with a total capacity of 102
MW are under construction on schedule, helping REE
increase more than VND 700 billion in revenue from
wind power sales and more than 100 billion VND in
EAT after minority interests

86 MWp of rooftop Solar PV completed in 2020
will help REE increase revenue by VND 180 - 190
billion and nearly 80 - 90 billion VND in NPAT in
2021
La Nina continues to help hydropower businesses in the
portfolio continue to receive large amounts of water,
thereby increasing revenue and profit.
At the same time, Power demand peak load in June 2021
will help thermal power companies, especially in the
North and Central regions, to increase their output..

Increasing the occupancy rate to 99% compared to the average of

97.5% in 2020 helps the revenue and profit of office leasing improve
Ground breaking of Etown 6 at the beginning of the year will help
increase 40,000 square meters, bringing the total area to more than
200,000 square meters by 2023.
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 Logo
DN REE – BUY
VALUATION TARGET PRICE

DCF, P/E method 67,100 67,100

BUY +18.5%

PRICE RELATIVE TO INDEX ESTIMATE

65,000

Unit: VND billion 2020 2021F 2022F

55,000

45,000 Revenue 5,644 6,411 7,284

35,000 +/- yoy (%) 15.26% 13.60% 13.61%

25,000 NPAT 1,628 1,888 2,123

15,000
+/- % -0.66% 15.9% 12.49%

EPS 5,251 6,088 6,849

REE Relative VNINDEX
Source: VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 18 Back
 TV2 – SUMMARY
TV2’s business
Shareholder portion Revenue structure
Consulting, electrical construction is the main activity of the company with 92% Insdie: 2019
Outside: 2020
of revenue in 2020. Mechanical accounts for 7% of revenue. In addition, power EVN
generating accounting for only about 1%. Currently, investment in power Construction
America
projects is one of the main strategy of TV2. The O&M service also has quite a LLC
large potential with 5% in revenue in our assessment. Toan Viet Mechanical

Shareholder structure Worker

Power
union
The biggest stack holder is EVN with 51,3%, followed by America LLC Others
(4,93%), Toan Viet investment (4,73%) and the others.
1H.2021 Source: TV2, VCBS
1H.2021 revenue grew strongly, reaching VND 1,706 billion (+66% yoy,
VND Bil
reaching % of year plan) mainly due to revenue accounting from completing Business performance
4,000 25.0%
more than 1/3 of Tan Thuan wind power project. GPM dropped sharply from
3,500 21.7%
11.5% in the same period to 6.5% in 1H 2021 mainly due to accounting for most 19.9% 20.0%
3,000
of wind power equipment with low NG. As a result, GP only reached VND 117 2,500 15.0%
billion. Thanks to the increase in financial revenue from interest on deposits, 2,000 13%
11%
distributed profit and other financial profit increased over the same period to 35 1,500 10% 10.0%
billion dong (+29% yoy) and other income 16 billion dong, making up for the 1,000
5.0%
shortfall provision reversal similar to the same period last year and an increase 500 214 225 255 262
94 124
in corporate governance cost made the company's 1H2021 NPAT reach VND - 0.0%
2017 2018 2019 2020 1H.2020 1H.2021
100 billion (+5.9% yoy, reaching 37% of the year plan).

Total Revenue Profit after Tax Gross Profit margin

Source: TV2, VCBS

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 19 Back
 Power engineering consulting JSC 2– TV2
CATALYST
MW

O&M is a new segment with high profit margin (with 30 –

35% in GPR) and strong growth potential in the future when
its reputation increases in the market and project sources from
EPC or PMC segments.
The O&M capacity in 2021 is triple compare to 2020
with more than 1,600 MW, which will help the O&M revenue
increase sharply, estimated at VND 180 billion, NPAT
estimated at VND 50 billion

Increase the efficiency of asset use by investing in high efficiency Source: TV2, VCBS
projects with the advantage of implementing planning, Pre-FS, FS….

Tan Thuan Wind power: 75 MW

Solar Son My 3.1: Own 25%. IRR IRR: 18%

nearly 20% Ownership: 25%
Solar Vinh Tan power center: 6,2 Operation: 10.2021
MWp, 100% ownership, IRR nealy 18% Ba Tri offshore wind
(Operated from 2019)  Negotiating

Hau Giang Biomass (20 MW) Thac Ba 2 hydropower (18,9 MW)

Ground breaking : 4Q.2021 Ground breaking in 4Q.2021
Ownership: 30% Ownership: 45%.

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 20 Back
 Power engineering – TV2
CATALYST
As an EPC general contractor for construction and installation, project managers are increasingly
experienced in doing difficult items to help increase revenue quickly in the near future when wind power
projects are prioritized for development and thermal power projects are accelerated investment procedures.
So they got we got=> Huge potential for TV2 when responsible for more parts of EPC general contractor of each
project. (you can imagine that a thermal project with 3- 5 billion dollar.

Tan Thuan Wind power Quang Tri 1 Thermal power

 Capacity: 75 MW  Capacity: 1.320 MW
 Total investment: VND 3.600 billon  Task: consortium of EPC contractors
 Task: EPC general contractor Long Son LNG fired thermal power
Chinh Thang wind power  Capacity: 3.600 MW
 Capacity: 50 MW  Task: consortium of EPC contractors
 Task: substation and grid line Hau Giang Biomass power
Duyen Hai 2 thermal power  Capacity: 20 MW
 PMC, 500 KV substation  Task: EPC general contractor.
Kien Binh – Phu Quoc grid line
 EPC
Total backlog value in 2021: VND 3.800 billion

KINH TẾ VĨ MÔ TRÁI PHIẾU THỊ TRƯỜNG CỔ PHIẾU NGÀNH VÀ DOANH NGHIỆP TRIỂN VỌNG 21 Back
 TV2 – BUY
VALUATION TARGET PRICE

SOTP METHOD 61,100 61,100

BUY +20.2%

Price relative to index ESTIMATE

95,000
85,000 Unit: VND billion 2020 2021F 2022F
75,000
65,000 Net Revenue 3,346 3,790 4,084
55,000
45,000 +/- yoy (%) 0.75% 13.24% 7.77%
35,000
25,000 NPAT 262 301 375
15,000
5,000 +/- % 2.77% 14.77% 24.73%

EPS 7,280 8,355 10,421

TV2 Relative VNINDEX Source: VCBS

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 DISCLAIMER
This report is designed to provide updated information on the fixed-income, including bonds, interest rates, some other related. The VCBS
analysts exert their best efforts to obtain the most accurate and timely information available from various sources, including information
pertaining to market prices, yields and rates. All information stated in the report has been collected and assessed as carefully as possible.
It must be stressed that all opinions, judgments, estimations and projections in this report represent independent views of the analyst at the
date of publication. Therefore, this report should be best considered a reference and indicative only. It is not an offer or advice to buy or
sell or any actions related to any assets. VCBS and/or Departments of VCBS as well as any affiliate of VCBS or affiliate that VCBS
belongs to or is related to (thereafter, VCBS), provide no warranty or undertaking of any kind in respect to the information and materials
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This report may not be copied, reproduced, published or redistributed for any purpose without the written permission of an authorized
representative of VCBS. Please cite sources when quoting. Copyright 2012 Vietcombank Securities Company.
CONTACT INFORMATION
Any further information, please contact as below:

Tran Minh Hoang Ly Hoang Anh Thi Trinh Van Ha

Head of research Deputy head of research Equity research

tmhoang@vcbs.com.vn lhathi@vcbs.com.vn tvha@vcbs.com.vn

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