REE Flash Note – NEUTRAL

REE Corporation (HOSE: REE)

REE released its Q2/2025 results, with VND2,513 bn in revenue, +15.2% yoy, VND853 bn in gross profit, +25.4% yoy, and VND623 bn in NPATMI, +75.5% yoy. Cumulative 6M2025, NPATMI reached VND1,235 bn, achieving 51% of its plan and 52% of ACBS’s 2025 forecast. This positive performance was fueled by profit growth across all business segments, particularly in the energy sector due to favorable weather conditions for hydropower (which dominates REE’s energy portfolio) and the real estate sector. We maintain a Neutral rating for REE, with a target price of VND71,300/share, implying an expected total return of 7.4%.

The +15.2% yoy in Q2/2025 revenue was primarily driven by +25.7% yoy in the energy segment revenue, reaching VND1,145 bn, and +34.2% yoy in the real estate segment revenue, at VND443 bn. The growth in the energy segment was a direct result of more favorable weather conditions as the ENSO cycle transitioned from an El Niño to a Neutral phase for the 2025 – 2026 period. The real estate segment’s revenue growth was attributed to the transfer of a high-rise building land plot within the Bo Xuyen project, while office rental revenue remained stable. The real estate segment’s NPATMI also saw a notable 40.9% yoy increase, reaching VND217 bn, thanks to the profit from the Bo Xuyen land plot transfer and a significant profit contribution from its associate company, SGR (Saigonres), which recorded an NPAT of VND49 bn in Q2/2025, a strong recovery from a VND10 bn loss in Q2/2024.

These two business segments, which typically have above-average gross margins in REE (over 65% for real estate and over 45% for energy), contributed to a 33.9% improvement in the gross margin, up from 31.2% yoy. This resulted in a gross profit of VND853 bn, +25.4% yoy. Additionally, other costs were effectively reduced, most notably a 21.3% yoy decrease in administrative expenses to VND137 bn. These factors collectively contributed to the 75.5% yoy growth in NPATMI, which reached VND623 bn, and an improved NPATMI’s margin of 24.8%.

Cumulative 6M2025, revenue reached VND4,581 bn, +14.0% yoy. Gross profit was VND1,421 bn, +26.9% yoy, and NPATMI reached VND1,235 bn, +47.6% yoy, with the NPATMI’s margin improving to 26.9% .