- We increase our target price (TP) for TDM by 7% to VND58,800/share and upgrade our rating from OUTPERFORM to BUY. Our higher TP is due to (1) a 6% higher valuation for BWE, 2) a 14% average higher valuation for TDM’s associated companies, and 3) a 6% higher valuation for TDM’s water generation business (with the positive impact of rolling our TP to end-2025 outweighing an 8% decrease in our aggregate 2024-2028F NPAT-MI forecast (respective changes of  -8%/-10%/-7%/-6%/-8% in 2024/25/26/27/28F).

- Our lower aggregate NPAT-MI forecast is driven by our lower water tariff hike assumption from 5% to 3% p.a. starting from July 1, 2025, and 2% lower aggregate volume assumptions.

- We forecast NPAT from water generation to grow 32% YoY in 2025, driven by a 3% higher water tariff from July 1, 2025, and sales volume growth of 7% YoY. We expect 2025F reported NPAT to surge 80% YoY mainly due to a 4x increase in financial income with BWE’s cash dividend.

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