Many stories from macro policies to individual businesses become the basis to support the electricity industry's prospects in 2025.
Many stories from macro policies to individual businesses become the basis to support the electricity industry's prospects in 2025.
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| Nhon Trach 2 Petroleum Power Joint Stock Company completes 2024 profit target (Photo: Duc Thanh) |
A gloomy picture in 2024
Looking back at 2024, electricity businesses have not had many breakthroughs in both business activities and stock price movements.
The third quarter of 2024 is the first business quarter of the year to record many electricity enterprises with good profit growth. In particular, for the group of hydropower enterprises, in the fourth quarter of 2024, favorable hydrological conditions, the end of the El Nino phenomenon and the transition to La Nina have helped enterprises increase profits, such as Hua Na Hydropower (HNA) with a 75% increase in profit, Thac Ba Hydropower (TBC) with a profit 8 times higher than the same period...
Or the Vietnam Oil and Gas Power Corporation (POW) also had a sudden increase in profit in the third quarter of 2024, reaching 453 billion VND, 8 times higher than in the third quarter of 2023. However, this profit mainly came from financial revenue thanks to exchange rate differences and interest on bank deposits.
Nhon Trach 2 Petroleum Power Joint Stock Company (NT2) recorded after-tax profit in the third quarter of 2024 of VND 50.3 billion, a loss of more than VND 123 billion compared to the same period last year.
However, a positive business quarter is unlikely to pull up the overall level of the industry.
NT2 has just held a Board of Directors meeting to summarize the year 2024 with not very positive results. The figures show that in 2024, electricity output is estimated to reach 2.72 billion kWh, equal to 85% of the yearly plan; total revenue reaches 6,093 billion VND, equal to 96% of the yearly plan; pre-tax profit reaches 76 billion VND, completing the set target.
Although the 2024 profit plan was completed, compared to the previous period, this profit is at a 10-year low.
The NT2 Board of Directors meeting also said that since Nhon Trach 2 Power Plant went into commercial operation (in 2011), 2024 is considered the most difficult year. In addition to the reduced gas supply, the allocated contracted electricity output has decreased significantly, greatly affecting the production and business situation.
In general, the business results of electricity enterprises in 2024 are quite gloomy, mainly due to the harsh mobilization environment in the context of EVN facing financial difficulties.
Hydropower recorded very low output in the first 6 months of 2024, with many plants' selling prices decreasing when EVN cut the Qm ratio (output on the electricity market) from 10% to 2%, reducing the room for high price mobilization of the hydropower group. Meanwhile, gas-fired power continued to be unmobilized in the context of gas shortage and high selling prices; coal-fired power maintained good output, but the profit margins of plants decreased sharply in the context of increasing input prices and decreasing electricity market prices.
What opportunities are there for electricity businesses in 2025?
With the forecast of continued strong economic growth in 2025, the Ministry of Industry and Trade sets the base scenario for electricity consumption growth at 11-12%. This is considered a fulcrum for mobilizing investment capital for power projects in the context of slowing growth in power sources.
The context of power source growth being slower than load growth is a pressure, but also an opportunity for factories to benefit from a more positive mobilization trend, especially when the Ministry of Industry and Trade is strengthening preparations, determined not to let a power shortage happen like in 2023.
In addition, EVN's increase in retail electricity prices will improve the environment for mobilizing plants from 2025, creating more room to mobilize high-priced electricity groups such as gas-fired electricity.
In addition, the revised Electricity Law passed in November 2024 acts as an overall legal corridor for the industry, covering major policies on electricity development planning, investment in electricity project construction, and development of renewable energy and new energy.
In addition to some prominent issues such as allowing the development of nuclear power, eliminating cross-subsidy in electricity prices, reforming the electricity market, etc., the revised Electricity Law continues to promote the role of renewable energy sources, LNG electricity and requires mechanisms to accelerate investment in these power sources.
Immediately after passing the Electricity Law, the Government issued a plan to implement the law. Accordingly, it clearly stipulates the content of work and responsibilities for important circulars and decrees of the industry. MBS believes that this will be an important basis for the circulars and decrees to be quickly issued in 2025, creating a more open investment environment, especially for the renewable energy and gas-fired power groups.
In the 2025 electricity industry investment strategy, MBS analysts noted that investors can choose stocks with good potential for price increases above cheap valuations, especially prominent representatives with long-term investment stories in line with the development of the wind and gas power groups, along with forecasted profit growth with a recovery from a low base based on analysis of mobilization trends. PC1, NT2 or POW are all assessed to have positive prospects in 2025.
In detail, the outlook for each group in the electricity industry, MBS forecasts that 2025 will be the period of restarting renewable energy development, while in terms of mobilization, the thermal power group will benefit. From 2025, the renewable energy industry will benefit from many important policies that have been and are being accelerated to be issued, including the direct power purchase mechanism DPPA, and preliminary calculations of the wind power price framework.
On the other hand, the analysis team also expects to have final conclusions and solutions for the erring renewable energy group. The above factors will end the gloomy period of the industry in the past 3 years, restarting the development process of the group to match the tasks in the Power Plan VIII.
For the gas-fired power group, in addition to clearing the LNG electricity price framework and supporting the implementation of new plants, businesses also expect to recover mobilization after a period of poor mobilization in 2023-2024 due to gas shortage. Coal-fired power mobilization is also expected to remain high, in the context of needing to prepare for unfavorable hydrological scenarios from the second quarter of 2025.
Source: https://baodautu.vn/nhieu-co-hoi-cho-doanh-nghiep-nganh-dien-d240120.html
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