- We raise our target price (TP) for PPC by 1.3% to VND15,400/share and maintain our OUTPERFORM rating. Our higher TP reflects (1) a 3.0% higher valuation for PPC’s standalone power generation business, due to a 0.4% increase in our 2023-2027F aggregate NPAT-MI forecast (-4%/+9%/-1%/-1%/-1% for 2023/24/25/26/27F NPAT-MI, respectively) with higher dividends from QTP & HND following their recent cash dividend announcements, (2) a 0.6% lower valuation for PPC’s associate HND, and (3) a 1.2% lower valuation for PPC’s associate QTP. We cut our earnings projections for QTP and HND due to our lower CGM price assumptions, as stated in our December 18, 2023 Thermal Power Sector Update Report. 

- We cut our 2023F NPAT-MI forecast by 4% to VND358bn (-27% YoY) primarily because of our lower CGM price assumption. In contrast, we raise our 2024F NPAT-MI forecast by 9% to VND774bn (+116% YoY) mainly because of higher projected dividend income from QTP & HND.  The key underlying drivers of growth in NPAT-MI in 2024 are (1) a 32% YoY increase in sales volume from the full-year operation of the S6 generator and (2) 7% lower YoY material costs 

- We project a 20% EPS CAGR in 2022-2025F driven by (1) higher utilization rates thanks to the re-operation of PPC’s S6 generator from September 2023, driven by expected strong power consumption in the North Vietnam, (2) higher CGM prices, and (3) declining coal costs.

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