Title VSH_BUY_TP 35,000 VNĐ_Upside 26.6__Growth motivation from Thuong Kon Tum_BSC Company Update
Report Type Phân tích công ty
Source BSC
Bussiness VSH
Detail Date : 30/09/2021
Total pages : 8
Language : English
File Type : .PDF
FileSize : 443 Kb
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Short Content

 

Valuation

§  BSC recommends BUY for VSH with a target price of VND 35,000/share for 2022 (equivalent to 26.6% upside compared to September 30, 2021) based on valuation method EV/EBITDA = 9.0x (equivalent to EV/EBITDA = 9.0x). average rate of enterprises in the same industry).

Forecasting business results

§  n 2021: BSC forecasts revenue and net profit of VND 1,563 billion (+359% yoy) and VND 379 billion (+101% yoy), respectively, EPS FW 2021 = VND 1,603/share base on assumptions: (1) Output Electricity produced in 2021 can reach 1.75 billion kWh (+213% yoy), of which Thuong Kon Tum contributes 870 million kWh and (2) The PPA electricity price in 2021 of Thuong Kon Tum factory can reach VND 914 /kWh.

§  In 2022: BSC forecasts revenue and profit after tax of VND 1,813 billion (+16% yoy) and VND 420 billion (+11% yoy) respectively, equivalent to EPS = VND 1,777/share based on assumptions: (1)  Electricity production in 2022 can reach 1.85 billion kWh (+6% yoy), of which Thuong Kon contributes about 1.04 billion kWh (+20% yoy) and (2)  Negotiate electricity price of Thuong Kon Tum successfully, the PPA electricity selling price from 2022 can reach VND 1,097/kWh (+20% yoy).

Investment Thesis

§  VSH's business results have favorable prospects thanks to the stable hydrological situation until mid-2022.

§  Thuong Kon Tum Hydropower Plant is a very important contributor to VSH's business results.

Risks

§  Risk of weather disrupting production activities of VSH.

Company Update

§  Net revenue and NPAT in 1H2021 reached VND 689 billion (+656% yoy) and VND 237 billion (75 times yoy%) respectively, thanks to (i) favorable hydrological situation which helps in production +323% yoy and (ii) hydrological situation. Thuong Kon Tum power (220 MW) has been operating since the beginning of Q2, increasing the amount of operating capacity for VSH.

Financial expenses in 1H2021 reached VND 110 billion (39 times yoy%) due to the interest expense of Thuong Kon Tum project when it comes into operation in Q2/2021.