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GEG Flash News – NEUTRAL
10/02/2025 - 5:43:43 CHGIA LAI ELECTRICTY JST (HoSE: GEG)
GEG announced Q4/2024 results with VND555 bn in revenue, -2.5% YoY, and VND12 bn in NPAT, -62.5% YoY. For 2024, NPAT reached VND92 bn, -35.6% YoY, fulfilling 34.1% of the 2024 plan and exceeding ACBS’s forecast by more than 3 times. However, the 2024 business results were still less positive compared to the same period last year due to the hydropower segment continuing to be affected by the 2023-2024 El Nino cycle.
Q4/2024 output decreased by 8.0% YoY, reaching 335 mil kWh. Of which, wind power reached 130 mil kWh, -15.0% YoY, and hydropower reached 129 mil kWh, -7.2% YoY. However, the average electricity selling price in Q4/2024 increased by 6.0% YoY, to VND 1,657/kWh, helping Q4/2024 revenue decrease by only 2.5% YoY, to VND555 bn. Gross profit reached VND205 bn, -19.0% YoY, and the gross margin decreased to 36.9% compared to 44.5% in the same period due to solar power having a thinner gross margin than the others.
For 2024, output was 1,347 mil kWh, +9.2% increase YoY, thanks to the Tan Phu Dong 1 being put into operation from May 2023, which helped wind power production increase to 647 mil kWh, +27.1% YoY. Revenue in 2024 increased by 7.5% YoY, reaching VND2,325 bn. However, gross profit reached VND1,072 bn, -4.2% YoY, and the gross margin decreased to 46.1% compared to 51.8% in the same period due to: (1) the average selling price for the whole year decreased by 1.6% YoY, to VND1,726/kWh, (2) the Tan Phu Dong 1 project is currently recording a temporary selling price equal to 50% of the ceiling price according to Decision No. 21/QD-BCT, and (3) the output structure changed when hydropower (which has a higher gross margin) decreased by 11.6% YoY in the expense of solar power increased by 6.1% YoY.
Quick conclusion: GEG completed 34.1% of the 2024 plan and exceeded our forecast for 2024 by 3 times due to a sharp decrease in interest expenses in Q4/2024. In which, raising capital to implement the Duc Hue 2 solar power project has been stagnant. For 2025, we forecast NPAT to reach VND211 bn, +129.9% YoY, thanks to reducing financial costs such as interest expenses and the return of the La Nina 2025-2026 cycle, which will have a positive impact on the company’s results. We give a target price of VND 13,700/share for GEG, representing a total expected return of 9.6%.
