POW Flash Note – NEUTRAL

PetroVietnam Power Corporation (HOSE: POW)

POW released its Q2/2025 results, with VND9,415 bn in revenue, +0.4% yoy, VND1,205 bn in gross profit, +63.9% yoy, and VND 733 bn in NPAT, +65.8% yoy. Cumulatively 6M2025, NPAT reached VND1,205 bn, +83,1% yoy, surpassing POW’s  plan by 174% and achieving 98% of ACBS’s 2025 forecast. This strong performance is largely due to substantial reductions in operating costs, stemming from a more favorable electricity generation mix, despite a slightly lower average selling price.  Rating Neutral, with a target price of VND15,200/share, representing an expected total return of 3.2%.

Total output increased by 1.0% to 4.9 bn kWh, leading to +0.4% yoy in revenue. Gross profit for Q2/2025 rose by 63.9% yoy to VND1,205 bn, with the gross margin improving from 7.8% in the previous year to 12.8%. This improvement was primarily a result of a decline in operating expenses. Specifically, raw material costs fell by 7.8% yoy to VND6,542 bn, labor costs decreased by 11.1% yoy to VND240 bn, and outsourced costs dropped by 17.5% yoy to VND624 bn. The reduction in operating costs was mainly driven by a strategic shift in the generation mix. The output from high-cost gas-fired power plants was reduced, while production from lower-cost coal-fired and hydropower plants increased. This change was further amplified by a decrease in coal prices, even as gas prices rose. Additionally, POW received VND100 bn insurance compensation for its Vung Ang 1 (VA1), with another VND311 bn expected later this year. This contributed to +65.8% yoy in NPAT, at VND733 bn, with the NPAT’s margin improving to 7.8%.

Cumulative 6M2025, output reached 9.1 bn kWh, +9.0% yoy. Revenue was VND17,565 bn, +12.4% yoy. Gross profit surged to VND2,021 bn, +81.7% yoy, and NPAT reached VND1,205 bn, +83.1% yoy, with the NPAT’s margin improving to 6.9%.