Macro/ Strategy

The FED has kept the policy rate unchanged, but investors are expecting four rate cuts this year, which will support Vietnam in maintaining an expansionary monetary policy and economic recovery. In 2024, with a GDP growth scenario of 6-6.5%, national electricity consumption is expected to grow by 9%.

Vietnam stock market (VNINDEX) has returned to an upward trend and conquered the old peak of 1,250 in 2023. For 2023, the “going green" energy investment portfolio had a return of +15.63%, which is still higher than the return of VNINDEX of 10%. Updated Business Results for 2023, net revenue decreased by -10% YoY and net profit decreased by -26% YoY. The reasons were a significant decrease in hydropower output due to unfavorable hydrology, the thermal power group facing maintenance of many plants, a sharp decrease in the selling price, a serious shortage of gas, and a decrease in the workload of the electrical construction group.

In 2024, the thermal power group (e.g., POW) is expected to have a higher mobilization rate as the power shortage in the North still exists, and the hydropower group will benefit in the second half of 2024. Notably, to solve the power shortage in the North, the Prime Minister has requested that the 500kV 3rd circuit transmission line extension project, consisting of 4 component projects, be completed by June 2024. Therefore, the electrical construction and installation group, such as PC1 and TV2, is expected to have a strong increase in business results when the workload in the construction and installation sector increases significantly.