We raise our TP for REE by 8% to VND93,000/share and maintain our OUTPERFORM rating. We view REE as a leading player in Vietnam’s green energy sector with profitable projects that are driven by its effective cost management and low financing expenses. We are optimistic about REE’s potential capacity expansion in Vietnam’s promising renewable sector with 400 MW and 1,000 MW of onshore and offshore wind power capacity, respectively, as well as its aggressive target to double its revenue to USD1bn in the next five years vs our forecast of ~USD600mn by 2026F.

Our higher TP is due to a 1% increase in our aggregate 2022-2026F NPAT forecast and higher target debt/capital of 40% (vs previously 20%), which outweigh a 50-bp increase in our in-house cost of equity assumption.

 We raise our 2022F NPAT forecast by 5% as we increase REE’s power earnings by 9% due our higher earnings forecast for the hydropower portfolio that outweighs our lower earnings forecast for PPC (see our PPC Update Report, dated August 24, 2022).