PVS - Positioning for worldwide upcycle in energy investment

We attended PVS’s Analyst Meeting on June 8, 2026.
Preliminary 5M NPAT before MI was VND563bn, achieving 29% of our 2026F forecast. We see insignificant changes to our 2026 earnings forecast, pending a fuller review, as: 1) preliminary numbers are always conservative and 2) a potential VND635bn guarantee provision reversal provides a strong buffer (vs our forecast of VND150bn).
We are confident in our 2027 NPAT forecast (+28% YoY) as PVS is confident with Block B’s margin and progress despite some increases in logistics & labor costs.
Management has provided more aggressive top-line guidance, with 2026–2030 revenue of VND210tn–220tn, (~39% higher than the previous guidance of VND150tn–160tn released in October 2025), and stated that the Blue Whale project will potentially get its final investment decision (FID) in 2027 ( sooner than our expectation).
Near-term opportuinities with oil & gas projects in the Middle east provide upside to our 2027 earnings forecast. Meanwhile, a substantial workload from Blue Whale, PVN’s offshore wind project, offshore wind power export to Singapore, and nuclear power are upside catalysts for our 2028-2030 earnings forecast.
Management expects 2026–2028 to be a heavy investment phase to build capacity for stronger growth in 2029–2030, with major capital raising likely concentrated around 2028–2029, aligned with FID milestones for key projects such as subsea cables and offshore wind exports.
We currently have a BUY rating for PVS with a target price of VND60,000/share.

Conservative 5M results but provision reversals are a strong buffer to our 2026F NPAT forecast:

Preliminary 5M 2026: Revenue was VND13.5tn (+34% YoY; 32% of our 2026F forecast), while NPAT before MI was VND563bn (+11% YoY; 29% of our 2026F forecast). Overall, 5M 2026 revenue growth reaffirms our 2026 revenue growth forecast of +28% YoY. PVS tends to be conservative in its preliminary estimates; historically, during 2018–2024, actual profits exceeded preliminary figures by 24% on average.
Potential provision reversal in 2026: Management expects to sign the final acceptance minutes for the Sao Vang Dai Nguyet project this year. If the signing process proceeds have no additional repair work required by the project owner, PVS could recover/reverse around VND600bn in provisions (as of end-Q1 2026, PVS’s provision balance for this project stood at VND684bn). In addition, PVS could also reverse provisions related to other projects, including the Long Son Petrochemicals complex (provision balance of VND14bn as of end-Q1 2026) and the Thi Vai LPG storage project (VND21bn). The total amount could reach VND635bn, equivalent to 26% of our 2026F PBT forecast.

2026–2030 guidance reaffirms a resilient long-term outlook:

Revenue guidance: PVS guides for 2026–2030 revenue of VND210tn–220tn (~39% higher than its previous guidance of VND150tn–160tn released in October 2025). This is 98%–108% higher than aggregate revenue during 2021–2025 and equivalent to 91%–95% of our 2026–2030 forecast. For 2030, PVS targets revenue of VND60tn (~30% higher than our 2030 forecast), implying a 2025–2030 CAGR of 13%.
Dividend payments: PVS targets a dividend ratio of 7%–10% of par value during 2026–2030, with cash or stock to be determined. We currently forecast a cash dividend of VND700/share per year during 2027–2030.

Major share capital raising likely concentrated in 2028–2029 to support large-scale projects:

Management identified 2028–2029 as the likely window for PVS’s most significant capital raising, aligned with key project milestones such as the subsea cable manufacturing project (expected FID in 2028), and the Singapore–Malaysia offshore wind export project being jointly developed with Sembcorp (expected FID in 2029). Management now expects FID for the offshore wind export project in 2029, later than previous guidance, given the need for strong Government support and cross-border coordination.
Management also shared that share capital increases could exceed guided levels if major projects progress smoothly and require additional funding. At the 2025 AGM, PVS outlined a long-term plan to raise charter capital to VND9tn (+76% vs.the current VND5.1tn) and potentially VND13tn (+155%) by 2030.

Management shared that the Blue Whale giant gas project could have a field development plan (FDP) in 2027:

The project is currently evaluating up to four development concepts, which could include offshore production platforms and FPSO facilities/or direct gas pipelines to onshore for processing. Details on total investment value and the number of oil & gas platforms have not yet been disclosed and are expected after FDP approval. PVS emphasized that it will pursue related EPCI packages and remains confident in securing a meaningful share.
PVS also expects to participate in power plant construction.
We note that we are estimating Blue Whale capex’s at USD5bn, broadly similar to Block B while its reserve is ~40% higher.

Middle East reconstruction and energy security trends create opportunities for PVS’s oil & gas services. Management continues to view the Middle East as an attractive market, with post-conflict reconstruction expected to drive demand for oil & gas infrastructure. In parallel, rising energy security concerns should encourage resource-rich countries to accelerate exploration and field development, supporting demand for PVS’s offshore EPC project.

Taiwan offshore wind market outlook:

Management noted that Taiwan’s Round 3.1 and 3.2 auctions have faced challenges from stringent localization requirements. However, Round 3.3 is expected to have lower localization requirements, creating bidding opportunities.
PVS remains confident in securing contracts, particularly in OSS. Beyond Taiwan, management expects the global offshore wind market to recover strongly after 2028 as policy headwinds ease, particularly in the US. PVS noted that policy uncertainty under the Trump administration has contributed to delays of several US offshore wind projects, including two large opportunities that PVS had previously pursued with its strategic partner Orsted in 2025.
Looking ahead, management believes recent disruptions around the Strait of Hormuz also reinforce the importance of energy security, supporting renewable investment as countries diversify energy supply and maximize domestic resources (i.e., wind and solar).

M&C capacity expansion and automation completed in 2028 to boost growth:

PVS has expanded its M&C execution capacity, with revenue capacity increasing from USD500mn in 2021 to USD1bn in 2024, and is on track to scale this further to USD2bn. The company is now investing in automation, particularly in automated welding workshops and fabrication facilities. It expects the upgrade program to be completed by mid-2028.
PVS has also approved key investment in a heavy-lift crane worth VND1.5tn, which should allow the company to self-perform installation of large offshore structures, reduce reliance on third-party equipment, and improve execution flexibility.

PVS is most competitive in offshore substations (OSS), while its jacket/foundation capabilities continue to improve:

Management highlighted OSS as PVS’s strongest segment, supported by proven engineering, fabrication, and execution capabilities, and remains confident in securing future OSS contracts against international competitors.
For jacket foundations, its win rate is moderate, depending on market conditions. Ongoing automation upgrades at its fabrication facilities should gradually improve productivity and competitiveness over time.

PVS to expand its onshore EPC segment: Management believes Vietnam lacks a truly capable domestic EPC contractor for large-scale industrial infrastructure projects, with a market worth VND10tn annually that remains largely dominated by Korean and Chinese contractors. As a result, PVS is building capabilities to compete directly in this segment and gradually capture market share from foreign players. Management emphasized that, from a technical perspective, onshore projects (gas-fired power plants, storage terminals, industrial facilities) are less complex than the offshore oil & gas and offshore wind projects that PVS has successfully executed. That said, management acknowledged that margins may remain modest during the initial phase as the company continues to establish its market position.

Expanding into industrial manufacturing: PVS is developing a large-scale industrial hub in Vung Tau to support offshore renewable energy fabrication. In the near term, PVS will invest in subsea cable manufacturing (expected to make the FID in 2028) and is currently finalizing project documentation for submission to relevant authorities.