PV Power (HOSE: POW) | Q4 2025 Update, BUY– 1Y Upside +17.8%

Nhon Trach 3 and 4 is the Key Pillar Growth in FY2026

POW delivered solid earnings in FY2025, supported by improved dispatch across its gas-fired portfolio, favorable hydrological conditions for hydro power, and disciplined bidding strategies amid a softer wholesale pricing environment. FY2025 consolidated revenue reached VND 34,151 bn (+12.7% YoY), while NPAT-MI surged to VND 2,341 bn (+110.6% YoY), surpassing our FY2025 forecast revenue and NPAT forecast by 103.1% and 105.1% respectively.

In FY2025, gas-fired generation remained the core earnings driver, with segment revenue reaching VND 20,696 bn (+5.3% YoY), supported by Nhon Trach 1 and 2. While Ca Mau 1 & 2 underperformed (–9.6% YoY) due to weaker dispatch in the Southwest amid rising wind penetration. Vung Ang 1 delivered FY2025 revenue of VND 11,368 bn (+5.3% YoY), with dispatch recovering toward late Q4 as system balance normalized, while the hydropower segment outperformed, with revenue rising to VND 1,507 bn (+27.2% YoY), exceeding our forecast by 20.3%.

From a balance sheet perspective, POW entered 2026 with improved financial flexibility. Gross fixed assets increased to VND 94,843 bn (+34.5% YoY) following the capitalization of Nhon Trach 3 & 4, while cash and equivalents remained strong at VND 19,269 bn. Long-term debt rose to VND 19,522 bn, primarily reflecting project loan disbursements for LNG investments, alongside a decline in prepaid gas balances in line with take-or-pay obligations.

Looking ahead, 2026 represents a key inflection point, as Nhon Trach 3 and 4 are expected to commence full Qc-backed operations, materially improving gas-fired output and earnings visibility. Supported by a diversified generation mix, more normalized wholesale pricing conditions, and a strengthened balance sheet, POW is well positioned to enter the next earnings upcycle.

We maintain our FY2026 forecasts, with revenue projected at VND 49,588 bn (+49.8% YoY), broadly in line with management guidance, and NPAT-MI of VND 2,252 bn (–3.8% YoY), materially above POW’s target. Topline growth is expected to be driven by the first full-year contribution from Nhon Trach 3 and 4, while earnings will be partially offset by higher depreciation, interest expenses, and FX headwinds. Nevertheless, improved Qc-backed dispatch visibility and a more normalized wholesale pricing environment should support earnings resilience.

We maintain our Forward 2026 target price for POW at VND 16,200/share, following adjustments for the recent share issuance. We keep our BUY rating on POW, implying an upside of 17.8% from the closing price of VND 13,750/share as of 1 February 2025