POW Update- OUTPERFORM

POW announced Q3/2025 results with VND7,855 bn in revenue, +30% YOY, and VND948 bn in NPAT, +109% YoY. Accumulated 9M2025, NPAT reached VND2,181 bn, +96% YoY, nearly five times its plan and twice ACBS’s forecast for 2025. POW’s strong 9M2025 performance was driven by higher output and a favorable change in its power generation mix, with hydropower and coal-fired power accounting for major part of the additional output. In addition, POW recorded more than VND300 bn in insurance compensation from PVI. We therefore revise up target price for POW from VND15,200/share to VND16,400/share, representing a total expected return of 15.0%, rating OUTPERFORM.

Revenue in Q3/2025 increased by 30% YoY to VND7,855 bn, supported by a rise in output to 4.3 bn kWh, +41% YoY, while the average selling price decreased slightly by 1% YoY to VND1,894/kWh. The power generation mix was also improved as hydropower output rose by 34% YoY to 535 mil kWh thanks to favorable rainfall in the Central and Northern provinces, and coal-fired output surged by 75% YoY to over 1 bn kWh. These sources have significantly lower costs than gas turbines, helping to reduce POW’s overall costs. In addition, POW recorded another VND100 bn in insurance compensation during Q3/2025. As a result, gross profit rose to VND1,291 bn, + 336% YoY, with gross margin improving to 16% from 5% YoY. NPAT reached VND948 bn, +109% YoY, and NPAT’s margin expanded to 12% from 8% YoY.

For 9M2025, output reached 13.4 bn kWh, +18% YoY, revenue stood at VND25,404 bn, +17% YoY. Gross profit reached VND3,275 bn, +133% YoY, and NPAT reached VND2,181 bn, +109% YoY, with NPAT’s margin improving to 9% from 5% YoY.

Quick conclusion: POW delivered strong 9M2025 results which is five times higher than its plan and double ACBS’s 2025 forecast. We expect that when NT3&4 officially commence commercial operations in mid-Q4/2025, POW will have to bear  initial losses from these plants due to higher depreciation, interest, and operating costs while output and revenue ramp up gradually. Nevertheless, we believe 2025’s results could slightly exceed our previous forecast, supported by higher output and average selling prices from existing plants. Accordingly, we raise target price from VND15,200/share to VND16,400/share, rating OUTPERFORM