TDM [OUTPERFORM +12.2%] - NPAT from water generation to improve in 2024F

- We cut our target price (TP) for TDM by 6% to VND44,600/share and downgrade our rating from BUY to OUTPERFORM. Our lower TP is mainly due to our 16% lower 2023-2027F aggregate NPAT-MI forecast (respective decreases of 3.1%/20.0%/17.7% for 2023/2024/2025F) and BWE’s lower value contribution to TDM’s fair value outweighing the positive impact of rolling our TP horizon to end-2024 and the incorporation of a 42% stake in DNP Quang Binh Water JSC.

- We decrease our 2023-2027F aggregate NPAT-MI forecast mainly due to our 11% lower 2023-2027F aggregate water sales volume forecast and the delayed water tariff hike of 3% from early 2024 to July 1, 2024.

- We project 2023F reported NPAT-MI to grow 28.7% YoY thanks to the recognition of dividend income from BWE. Meanwhile, we expect water sales volume to remain flat YoY in 2023.