Earnings Report /
Vietnam

PetroVietnam Nhon Trach 2 Power: Despite the low volume in Q3 21, revenue grew 8% yoy thanks to externalities

  • The company provided extremely low volume in Q3 21 because of low demand, which was affected by the strict lockdown

  • Despite the low volume, revenue in Q3 21 was VND1,250bn, +8% yoy and -23% qoq thanks to a contract compensation

  • Our target price is VND24,300 with a VND1,000 dividend in the next 12 months, implying a total return of 9%; Neutral

Thao Dang
Thao Dang

Food & Bev, Textiles

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Rong Viet
2 November 2021
Published byRong Viet

Volume in Q3 21 reached 461mn kWh, -40% yoy and -52% qoq. The company provided extremely low volume in Q3 21 because of low demand, which was affected by the strict lockdown in HCMC and the south of Vietnam. The company only provided roughly half of its contract volume.

Despite the low volume, revenue in Q3 21 was VND1,250bn (or US$54mn), +8% yoy and -23% qoq thanks to the compensation revenue that was ensured by contract volume. Meanwhile, COGS declined by 13% qoq and -161% yoy in line with the low volume trend. Gross profit was VND305bn (or US$13mn), +349% yoy and +318 qoq. NPAT was VND273bn (or US$11.8mn) versus a loss in 2020.

For FY 21, revenue and NPAT are forecast at VND5,925bn (or US$258mn) and VND471bn (or US$20.5mn), -3% yoy and -25% yoy, respectively. This forecast does not include potential FX revenue.

The company’s profit might tail off in the medium term, but its prosperous cash flow might attract investors. Our target price is VND24,300 with a VND1,000 dividend in the next 12 months, implying a total return of 9% compared to the closing price on 2 November 2021. We are Neutral on this stock. Note that the company might pay more dividend up to VND3,000 per share.