GEG [MARKET PERFORM -8.5%] - Lower TP due to lower tariffs for transitional power plants - Update

- We cut our target price (TP) for GEG by 15% to VND12,900/share and downgrade our rating from OUTPERFORM to MARKET PERFORM.

- Our lower TP is due to a 20% cut in our aggregate 2023-2032F NPAT forecast that is due to our average selling price assumption for GEG’s upcoming renewable power projects lowering by ~13% over the forecast period to reflect the new price mechanism issued by the Ministry of Industry and Trade (MoIT) in January 2023.

- We forecast 2023F core NPAT-MI to rise 24% YoY with higher profit from GEG’s solar portfolio and four existing wind farms (130 MW) despite a potential loss from the new Tan Phu Dong 1 wind power plant (100 MW), which we expect will come online in mid-2023. Meanwhile, we expect 2023 reported NPAT to decline 21% YoY without a divestment gain like in 2022.

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