REE Update – BUY

REE reported Q1/2026 results with VND714 bn in NPATMI, +17% YoY, fulfilling 25% of the company’s target and 26% of ACBS’s forecast for 2026. The positive Q1/2026 performance was driven by revenue and earnings growth across all business segments. For 2026, we maintain our valuation and forecasts for REE, given its position as one of the leading companies in the industry, its promising energy project pipeline, and its ability to develop such projects, supported by a strong financial position and stable cash flow generation. However, the share price has declined by more than 10% since our latest report, while REE completed the distribution of the remaining 2025 by 15% stock dividend in May 2026. Accordingly, our adjusted target price for REE in 2026 is VND61,400/share, implying a total expected return of 22.4%, rating BUY.

By Q1/2026, REE recorded revenue of VND2,471 bn, +20% YoY. The M&E segment delivered the strongest revenue growth, recording VND716 bn in revenue, +60% YoY, supported by VND4,900 bn of backlogs in Q1/2026 from large-scale projects, together with a remaining backlogs of VND6,800 bn at the end of 2025. The real estate (RE) segment recorded revenue of VND313 bn, +9% YoY. Management stated that this growth was attributable to improvements in office occupancy rates and average rental rates. The company did not recognize any real estate sales revenue from the Light Square project during the quarter.

Total NPATMI reached VND714 bn, +17% YoY. The energy segment remained the largest contributor, generating VND425 bn in profit, +3% YoY, as hydropower reservoirs continued to benefit from substantial water reserves accumulated during last year’s rainy season. In addition, the Duyen Hai 1 wind power project (48 MW) achieved commercial operation (COD) in Mar 2026 and contributed to earnings during the period. The RE segment recorded profit of VND127 bn, +23% YoY. The M&E segment posted the strongest earnings growth, +116% YoY, although it contributed only VND41 bn to the corporation’s NPATMI.

For 2026, we forecast NPATMI of VND2,709 bn, +7% YoY and 4% below the company’s target of VND2,815 bn. The difference is mainly attributable to our concerns regarding the subdued RE market amid a higher interest rate environment. Accordingly, we derive a target price of VND61,400/share for REE after adjusting for the stock dividend distribution, implying a total expected return of 22.4%, rating BUY.