Individual Clients
Corporate Clients
REE Update – NEUTRAL
06/03/2025 - 10:59:44 SAREE CORPORATION (HOSE: REE)
REE announced 2024 results, marking a second consecutive year of decline, with VND8,383 bn in revenue, -2.2% YoY, and VND1,994 bn in NPATMI, -8.9% YoY, achieving 82.8% of the 2024 company’s plan and 81.2% of ACBS’s forecast. However, the anticipated return of the La Niña cycle, which is expected to increase average precipitation, would positively impact the hydropower segment. Additionally, the M&E segment is likely to benefit from aggressive public investment initiatives by the government. Given these factors, we project that in 2025, revenue and NPATMI will grow by 18.3% and 23.9%, respectively. Therefore, we recommend the target price for REE in 2025 at VND75,800/share, rating NEUTRAL, representing a total expected return of 5.3%.
2024 results were negatively impacted by: (1) The recognition of operating expenses and depreciation from the Etown 6 project, while occupancy rates remained suboptimal; (2) Revenue recognition from the Bo Xuyen, Thai Binh project falling short of expectations; (3) A significant decline in energy sector profits due to the adverse effects of the El Niño cycle on the energy portfolio, primarily hydroelectric power, and (4) The Song Da phase 2 supply project incurring increased costs, such as depreciation and interest expenses, without corresponding revenue or profit recognition.
For 2025, NPATMI is forecast to experience a 23.9% YoY growth, driven by:
1. Energy sector recovery attributed to the La Niña cycle (Revenue: +14.1% YoY): Given that over 55% of REE’s energy sector revenue originated from hydro power, the return of the La Niña cycle is expected to facilitate a recovery in this segment’s performance.
2. Real estate and office leasing sector expansion (Revenue: +23.8% YoY): Expect sales acceleration in the Bo Xuyen, Thai Binh project due to a gradual revitalization of the real estate market, coupling with the expectation of higher occupancy rates in the Etown 6 project.
3. Water sector growth (Revenue: +4.0% YoY): Expect improvement through the recognition of revenue and profit from the newly implemented Song Da phase 2 water supply pipeline project.
4. M&E Sector Growth (Revenue: +22.8% YoY): Improved performance due to the absence of the provision that occurred in 2023, and due to the benefits gained from increased government spending on public investment.
