Individual Clients
Corporate Clients
GAS update – HOLD
15/09/2022 - 2:49:33 CH6M2022 Business results and outlooks
GAS recorded 2Q2022 business results with revenue of VND27,553 billion (+21.8% YoY) and NPAT of parent company’s shareholders increased sharply to VND5,086 billion (+124.8% YoY). Although selling volume did not change, the average Brent oil price in Q2 increased strongly by 65% YoY, which has positively supported the gas selling price as well as the revenue of GAS. To explain this, the gas selling price of GAS is based on fuel oil (FO) price, which has a high correlation with Brent oil price. As a result, GAS’s contribution margin also increased to 25%, higher than 16.6% in the same period last year. With this result, GAS recorded 6M2022 revenue of VND54,342 billion (+34.9% YoY) and NPAT of parent company’s shareholders at VND8,515 billion (+98% YoY); completing 68% and 121% of GAS’s full year plan respectively.
Regard 2H022 and onward outlooks, there are some pros and cons to consider:
– Brent oil price is expected to cool down but still remain at high level of 85-95 USD/barrel for the rest of the year as Russia-Ukraine war is still going on besides sanction on Russia oil & gas export by some countries => still supported natural gas’ selling price positively.
– Thi Vai LNG storage (phase 1) is expected to operate in 2023: supplying 1.4 billion m3 of gas/year and support GAS’s profit from mid-2023 as it will just come into operation
– However, the sharp increase in the global price of LNG will affect the import speed of LNG as well as the construction of LNG gas power plants that may face many difficulties in negotiating the Power Purchase Agreement (PPA) with EVN.
– The gradually decreasing source of low-cost gas along with the participation of renewable energy sources will reduce the competitiveness of gas-fired power plants in the Competitive electricity generation market.
Overall, we forecast average Brent oil price at USD93/barrel as well as GAS’ 2022 business results with revenue of VND102,644 billion (+30% YoY) and NPAT from parent company VND13,595 billion (+56.7% n/n). Along with the volatile of oil prices as well as concerns about inflation and global recession, we maintain our HOLD recommendation with a target price of VND 119,000 for 2022.
