GAS Flash note – OUTPERFORM

PETROVIETNAM GAS JSC (GAS VN)

GAS announced Q2/2025 business results with NPAT reaching VND4,808 billion (+40.7% YoY). For 6M2025, NPAT rose 27% YoY to VND7,571 billion, fulfilling 143% of the full-year target and 69% of our pre-adjusted forecast. Our current target price for 2025 is VND74,900 per share, implying an upside of 11.4%. OUTPERFORM.

In Q2/2025, GAS recorded revenue of VND30,080 billion (+0.1% YoY) and NPAT of VND4,808 billion (+40.7% YoY). However, NPAT increase mainly came from the reversal of a VND1,634 billion provision for receivables, compared to a provision expense of VND818 billion in the same period last year. This provision is related to bad debts from POW, PGV (Genco 3), and BOT power plants Phu My 2.2 & 3, which GAS had provisioned for in 2024 (a total of VND 1,918 billion).

Regarding GAS’s core business, gross profit declined 13.6% YoY and gross margin fell to 16.4% from 19% in the same period last year. This decline was due to:

• A 15.3% YoY decrease in dry gas volume, primarily due to lower gas supply to power plants. This was driven by higher hydropower output and the Ministry of Industry and Trade’s Decision 3049, which approved a 2025 gas supply plan for electricity production at 3.04 – 4.21 billion m³ (down ~14% on average from GAS’s 2024 supply volume).
• A 14% YoY decline in FO oil prices, negatively affecting gas selling prices.

These factors overshadowed the positive impact from LPG sales volume growth (+16% YoY) and LNG performance. For 6M2025, net revenue reached VND55,755 billion (+4.4% YoY) and NPAT achieved VND7,571 billion (+27% YoY). Profit growth primarily came from provision reversals, while core business profit declined due to a 13% YoY drop in dry gas volume.

Outlook

We maintain our forecast for Brent oil prices to average USD68/ barrel in 2025, down 15.5% YoY. Given the higher-than-expected provision reversal, we revise up our 2025 forecasts with revenue of VND104,051 billion (+0.5% YoY) and NPAT of VND12,061 billion (+13.9% YoY), up 0.3%/9.9% respectively versus our previous forecast. Using the DCF (Discounted Cash Flow) method, we value GAS at VND74,900 per share by end-2025.