GAS_BUY_TP 151,400_Upside 17%_Bright prospect_BSC company update

VALUATION

§  We maintain our BUY recommendation for GAS, with the target price in 2022 being 151,400 VND/share (+17% compared to the closing price on June 7, 2022), equivalent to a target P/E of 22x.

§  BSC forecasts that the net revenue and profit after tax of GAS in 2022 will reach 105,313 billion VND (+33% YoY) and 13,438 billion VND (+52% YoY), EPS FW = 6,881 VND/share with the assumptions (1)  Average oil price in 2022 will reach 100 USD/barrel (+37% YoY); (2)  Dry gas consumption reach 8.7 billion m2 (+24% YoY), LPG reach 2.1 million tons (+5% YoY).; and (3) The Thi Vai NLG port warehouse has not been put into the forecast in 2022.

INVESTMENT THESIS

§  High oil prices in 2022 will help improve the profit of GAS.

§  Gas output improves due to the demand for gas mobilization from power plants.

§  The LNG segment is a long-term growth driver, helping GAS to be re-evaluated.

RISKS

§  Dry gas and fuel prices are lower than estimated.

§  Key gas field projects are behind schedule.

BUSINESS PERFORMANCE UPDATE

§  The revenue of GAS in Q4/2021 is nearly 21,185 billion VND (+36% YoY) and Profit Before Tax is 1,846 billion VND (-12% YoY). In 2021, GAS's revenue reached 80,000 billion VND (+25% YoY), and NPAT reached 8,380 billion VND (+5% YoY), completing 119% of the plan.

§  LNG Thi Vai project was built on schedule, expected to be completed in Q4/2022.