A newly updated report of Rong Viet Securities (VDSC) said that the economy is gradually recovering after the heavy distancing period due to Covid-19 and power plants are gradually reopening. As a result, the mobilization rate of power plants is and will gradually increase in the coming time. Particularly in the first two months of 2022, output increased by 6.1% over the same period in 2021.
Thermal power group benefited from contract output and highly competitive selling price in the electricity generation market
According to the electricity market operation plan in 2022, the contract output of thermal power group is relatively high, enough to ensure profits for this group. VDSC assesses that thermal power enterprises have experienced a difficult period in 2021 and will have a promising year in 2022. Contract output of this group in 2022 will generally recover, however the growth rate will different.
VDSC forecasts that three power plants in the North, namely Hai Phong Thermal Power (HND), Quang Ninh Thermal Power (QTP) and Pha Lai Thermal Power (PPC) will be mobilized a lot due to limited supply and no businesses. renewable energy sector. However, HND and QTP are considered as two coal-fired power companies that will have high contract volume growth and great long-term potential. Meanwhile, although contract output has recovered, PPC’s growth is not as high as in previous years due to aging machinery.
In addition to having a high contract output in 2022, the selling price of electricity in the competitive power generation market is also relatively high compared to 2021. This will help power plants generating in the competitive power market have many opportunities. more profitable associations, such as large hydroelectricity and thermal power groups. Coal-fired power plants will be more profitable than gas-fired power plants due to the lower variable costs of coal-fired power plants, especially when gas prices tend to increase.
The cash dividend of thermal power stocks in 2022 will not be as attractive as the previous year due to the relatively poor production and business activities of this group in 2021. VDSCi estimates the dividend yield in the next 12 months of NT2, HND, PPC, QTP at 9%, 4%, 2%, 1% respectively.
Hydroelectricity is forecast to continue to benefit from the hydrological cycle
2021 is a favorable year for the hydropower group thanks to hydrological conditions. In particular, the forecast for the hydrological cycle has been adjusted, with the probability of La Nina still taking the highest proportion until October 2022. Therefore, the hydroelectricity group is expected to continue to benefit and store water well this year, especially the hydropower group from the Central region to the South.
Enterprises owning a diversified hydropower portfolio on the stock exchange include Refrigeration Engineering (REE), Electrical Construction 1 (PC1), and Gia Lai Electricity (GEG).
Renewable energy group is waiting for a new mechanism to expand the plant portfolio
According to VDSC, the profit from wind power enterprises operating commercially from the end of 2021 is forecasted to grow thanks to the full-year operation of these projects.
In addition, based on the latest updated draft Power Plan 8, Vietnam will continue to move towards green energy including solar power and wind power. Therefore, VDSC assesses that these enterprises will take advantage of their existing experience and industry incentives to continue to add new projects to their portfolio, increasing capacity and profits in the medium and long term.
Currently, these businesses are still waiting for a new mechanism, when there is a new mechanism on electricity prices, this will be a catalyst for the stock to increase.
Source: CafeF
Source: Vietnam Insider