QTP Update – NEUTRAL

Quang Ninh Thermal Power JSC (Upcom: QTP)

QTP announced Q3/2024 results with revenue of VND2,386 bn, -4.8% YoY, VND113 bn in gross profit, +82.3% YoY, and VND76 bn in NPAT, surged by 6.3 times YoY. For 9M2024, NPAT amounted to VND464 bn, +14.6% YoY.  This achievement represents 92.8% of the company’s 2024 target and 86.4% of ACBS’s forecast.

Q3/2024 revenue decreased by 4.8% YoY, primarily due to -17.2% YoY in output, which reached 1.3 bn kWh.  However, NPAT surged by 533% YoY to VND76 bn, driven by an improved gross profit margin of 4.7% compared to 2.5% in the same period last year. This improvement was attributed to (1) -36.7% YoY in depreciation to VND138 bn in Q3/2024; (2) an increase in the average selling price of electricity to VND1,830/kWh, +14.9% YoY, and (3) QTP’s effective management and operational cost, leading to a reduction in heat loss. Additionally, finance expenses declined to VND3 bn in Q3/2024, -89.7% YoY, primarily due to a substantial reduction in interest expenses (recorded at VND5 bn, -61.5% YoY), contributing to the growth in NPAT.

For 9M2024, revenue reached VND9,024 bn, -2.0% YoY, gross profit amounted to VND 608 bn, +12.6% YoY, while NPAT reached VND464 bn, +14.6% YoY. The gross profit margin improved to 6.7% compared to 5.9% in the same period last year, and the net profit margin increased to 5.1% from 4.4% in 9M2023. 

Quick conclusion: QTP achieved 92.8% of its planned NPAT after Q3/2024 and 86.4% of our 2024 forecast. We will continue to monitor and assess negative factors impacting QTP, such as the effects of storm (like Yagi in September 2024) on operational efficiency, maintenance and ignition costs, and the hydropower generation during the transition year between El Niño and La Niña. We will adjust our forecasts and valuations for the 2024-2025 period in our next report.

View details in the attachment below.