Title GAS_NEUTRAL_TP 78,500_Upside 7%_Difficulties ahead_BSC Company Update
Report Type Phân tích công ty
Source BSC
Industry
Bussiness
Detail Date : 22/07/2021
Total pages : 8
Language : English
File Type : .PDF
FileSize : 558 Kb
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Short Content

 Valuation

 We recommend TRACKING for GAS stock with a 2021 target price of VND 
78,500/share, +7% from 11/11/2020 based on P/E 2021 = 16x method.
 
Performance Forecast
  •  2020: net revenue = VND 63,991 billion (-15% yoy) and parent company's NPAT = VND 8,035 billion (-32% yoy), EPS FW 2020 = VND 4,198/share. Assume (1) gas output -10% yoy and (2) average oil price 2020 USD 41/barrel (-36% yoy).
  •  2021: net revenue = 75,257 billion VND (+18% YoY) and parent company's NPAT= 9,391 billion VND (+17% YoY), EPS FW 2021 = 4,907 VND/share. Assume (1) Sao Vang – Dai Nguyet field provides 1,500 m3 of gas/year, and (2) output of old fields -10% yoy.
 
Catalyst
  • Vietnam market will receive new cash flow after MSCI Review in November 2020. Accordingly, the proportion of GAS shares in the iShare fund is expected to increase from 0.14% to 0.35%, equivalent to a purchase value of $0.8 million (Refer to Link for details).
 
Investment thesis
  •  The slow recovery of oil prices negatively affected GAS's revenue. It is estimated that per USD change in oil price will affect VND 400 billion revenue and VND 100 billion NPAT of GAS in the same direction
  •  Gas output from old fields is estimated to decrease on average by 10% - 20%/year.Sao Vang – Dai Nguyet gas field will be exploited from November 2020, supplementing from 1,500 million m3 of gas/year from 2021, contributing about VND 13,000 billion in revenue.
 
Investment risks
Unplanned upstream incidents cause the fields to reduce/stop the gas supply.
 
Business update
  • Net revenue and NPAT in 9M2020 reached VND 49,420 billion (-15% yoy) and VND 6,071 billion (-33% yoy), respectively, due to declining gas output and low oil prices. GAS completed 75% of its revenue plan and 91% of its profit planThe super projects Block B - O Mon and Blue Whale continue to be behind schedule due to problems in agreement and financial difficulties, commercial exploitation time has not been determined