GAS Flash Note – OUTPERFORM

PETROVIETNAM GAS JSC (GAS VN)

GAS announced its Q3/2024 business results with NPAT of VND2,578 billion (+7.2% YoY), which is in line with our expectations. Accumulated in 9M2024, GAS’s NPAT decreased by 5.3% to VND8,538 billion, completing 147% of its full-year target and 83% of our forecast. Recommendation OUTPERFORM.

GAS recorded revenue of VND25,252 billion (+14.1% YoY) and NPAT of VND2,578 billion (+7.2% YoY) in Q3/2024. Revenue growth ma was primarily driven by the LPG business with LPG output increasing by 22% YoY and LPG selling price increasing by 24.4% YoY. Meanwhile, revenue from the dry gas segment is estimated to decline due to a 7.8% decrease in Brent oil price and a 1% decrease in dry gas output. This decrease in consumption was due to 15-day maintenance of the Ca Mau fertilizer plant in late August. G&A expenses also surged by 108.5% YoY to VND700.8 billion, mainly due to provisions for receivables related to the Phu My – HCM gas pipeline.

In 9M2024, GAS recorded revenue of VND78,619 billion (+16.7% YoY) and NPAT of VND8,538 billion (-5.3% YoY). Revenue growth was driven by the LPG segment and the first contribution from the LNG segment, which had not been recorded in the same period last year. However, NPAT decreased due to (1) a 96.4% YoY increase in G&A expenses to VND2,099 billion and (2) a 28.4% YoY decline in interest income from deposits.

Looking ahead to 2025, GAS’s business results are expected to improve significantly due to the following factors:

• Gas output (including LNG) supplied to electricity generation customers is expected to increase thanks to the participation of two new power plants NT3, NT4 in the coming time. Additionally, electricity production mobilized from gas-fired power plants is expected to recover after a decrease this year, driven by a projected 12-13% increase in electricity demand in 2025 (according to reports from relevant government ministries).
• Lower provision costs and potential for provision reversals in the future.

Quick comment: We forecast 2024 business results with revenue of VND100,503 billion (+11.7% YoY) and NPAT of VND10,523 billion (-10.8% YoY). For 2025, NPAT is expected to increase by 4.2% to VND10,970 billion. Our target price for GAS at the end of 2025 is VND76,200/share, equivalent to a total return of 13%.