- We increase our target price (TP) for BWE by 9% to VND48,500/share but downgrade our rating from BUY to OUTPERFORM. Our higher TP is due to an 11% increase in BWE’s stand-alone valuation following a 7% increase in our aggregate NPAT-MI forecast for 2024-2028F (respective increases of +3%/+5%/+7%/+7%/+8% for 2024/25/26/27/28F).

- Our higher aggregate NPAT forecast is due to (1) 7% higher NPAT forecast from water supply as we increase assumed water tariff hikes from 3% to 5% p.a. and increase water volume growth for 2024/2025F from 5%/10% to 7%/11% YoY, respectively, and (2) 8% higher NPAT from waste treatment following our increased residential waste tariff hike assumption from 10% to 20% starting Q4 2024. These changes outweigh slightly lower assumed power savings from the waste-to-energy project.

- We forecast a 48% YoY surge in NPAT-MI to VND1.1tn in 2025, fueled by a 5% water tariff hike from mid-2025, 11% total water volume growth, a 13% increase in industrial water volume (with a tariff ~26% higher than the residential tariff), the full-year impact of 20% higher residential waste tariffs and reduced financial expenses.

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