PVD_BUY_TP 19,800_Upside 13.9%__Overcoming the challenging 2022_BSC Company Update

 Valuation

▪ BSC recommends NEUTRAL for PVD at a target price of VND 19,800 per share for 2022, (+13.9% vs June 27, 2022) based on P/B and EV/EBITDA method with the proportion of 50% - 50%.

Busíness results forecast

▪ BSC forecasts PVD net revenue and NPAT in 2022 to reach VND 9,484 billion (+25% YoY) and VND 48 billion (+30% YoY) respectively, EPS FW = 61 VND/share with the assumption: (1) Operating performance of the jack-up rigs reach the average of 77% in 2022, (2) The average drilling rig rental price reachs USD 60 thousand/ day in 2022 (+15% YoY), and (3) Provision for an additional VND 54 billion for receivables from KrisEnergy.

Investment perspective

▪ Jack-up rigs are guaranteed to operate because of high oil prices.

▪ Daily rental price of Jack-up rigs is considered low in the area.

▪ The project series Block B – O Mon will provide a significant source of work for PVD in the period of 2023 to 2024 if they are implemented.

Investment risk

▪ Volatile oil price has influences on PVD’s rig rental price and profit.

▪ Average operation effect of jack-up rigs does not come up to expectation.

Business update

▪ In Q1.2022, PVD recorded net value reaching VND 1,146 billion (108% YoY), and after tax loss reaching VND 75 billion ( VND 110 billion in the same period). Q1 revenue increases YoY due to the fact that the TAD rig is placed in operation in January and there is one more outsourced rig. However, PVD still witnessed a lost due to (1) the rigs operating performance only reached 60%, the II rig and VI rig have 2.5 and 3 months of inactivity respectively, (2) jack-up rigs rental price remains low, and (3) joint ventures suffered loss in the first quarter.