Nearly 15 billion USD invested in power transmission grid
According to the National Power Development Plan for the period 2021-2030, with a vision to 2050 (power Plan VIII) approved by the Prime Minister, electricity is an important infrastructure sector, power development must take a step forward to create a foundation to promote rapid and sustainable development. The total investment capital for power transmission sources and grids in the period of 2021-2030 in the Power Plan VIII is about 134.7 billion USD, in the power transmission sector alone, it is 14.9 billion USD. In particular, investment capital in the electricity industry in the 2026-2030 period needs about 77.6 billion USD, of which the transmission grid will cost 5.9 billion USD.
Regarding the power grid, the Power Plan focuses on investing in 500kV lines, 500kV transformer stations, lines and 220kV transformer stations.
The National Power Transmission Corporation (EVNNPT) aims to start 34 projects in 2025, complete and energize 74 projects. The total investment value for construction is estimated at VND 20,670 billion, of which the net investment is about VND 14,746 billion.
Investment capital in the power transmission grid has been promoted along with the recent amendment of the Electricity Law, which will create a boost for businesses operating in the field of power infrastructure and power grids, especially when decentralizing investment policy decisions to the Provincial People's Committee for power grid projects and allowing the privateization of transmission lines from 220kV or less.
According to Shinhan Securities, the plan to double the length of the transmission line and transformer station by 2030, the compound annual growth rate (CAGR) for the construction of transmission lines and transformer stations is 11%/year and 13%/year, respectively. Therefore, businesses operating in this field will benefit.
Optimistic prospects of GEX companies
As a leading enterprise in the electrical equipment industry, GELEX Group Joint Stock Company (code: GEX) through its member company GELEX Electric owns 8 subsidiaries, manufacturing and supplying a complete set of products in the value chain of the electronics industry from transmission to distribution and civil. In particular, many brands with a prestigious, long history and the No. 1 market share in Vietnam such as: CADIVI electric cables, THIBIDI transformer, EMIC electrical measuring equipment...
According to securities companies, when investment capital in power grid transmission is increased, many projects started by GELEX electrical equipment enterprises will benefit greatly, especially when Vietnam Electricity Group (EVN) is the largest customer of the two strategic products of power cables and transformers.
The report of SSI Securities Company said that in the long term according to the Power Plan VIII, the total investment in the transmission grid is expected to increase significantly from an average of 1 billion USD/year in the period of 2011-2020 to 1.5 billion USD/year in the period of 2020-2030 and about 1.7-1,5 billion USD/year in the period of 2031-2050. EVN accounts for about 20% of cable revenue and about 50% of transformer revenue in GELEX Electric's revenue structure.
In addition, the recovery of the real estate and civil electricity markets is also a big boost in the development of revenue and profit for businesses. In 2025, GELEX aims to reach a record revenue of VND37,600 billion - an increase of 11.5% compared to 2024. Of which, the electrical equipment sector contributes nearly 60% to the group's revenue structure. GELEX Electric's net revenue target in 2025 is VND 22,282 billion, consolidated pre-tax profit is VND 1,686 billion.
Previously, in 2024, GELEX's electrical equipment segment also had breakthrough business results with net revenue exceeding VND21,130 billion, consolidated pre-tax profit reaching VND2,152 billion, up 27.2% and 112.6% respectively compared to 2023.
In particular, GELEX Electric is orienting member units to promote the production of gray and environmentally friendly electrical equipment products for smart grid; orienting cooperation in research and development of new high-tech products such as: fire-proof electric cables, fire prevention products, security equipment, monitoring, etc.
ABS Securities Company believes that in 2025, GELEX Electric's electrical equipment business will continue to grow positively, however, the energy sector may be affected when it has divested from a number of projects.
In the long term, we assess that GELEX Electric will be positive because according to the development plan for the electrical equipment manufacturing industry approved by the Government for the period 2015 - 2025, the electrical equipment industry in 2025 must produce and supply a complete set of electrical equipment for power line projects, transformer stations, 50-60% of the demand for 110-220KV transformers and meet 60-70% of domestic demand for electric meters, electrical equipment and measurement systems - monitoring the safety of the power grid, the entire set of electrical station equipment and exporting 19 - 20% of the production value, focusing on high-quality electrical wires and cables with an increase in export turnover of 35.5%/year.
Strong growth from renewable energy also requires more investment in electricity infrastructure, specifically transformer and power cable to avoid overloading the power grid. The high demand for electrical equipment from transport projects is to reduce congestion. The investment plan in the telecommunications sector also promotes growth for the wire and electrical equipment manufacturing industry, ABS commented.
According to ABS, the energy sector of the enterprise also benefits greatly from the VIII Power Plan and the gradual completion of the legal framework. Corporate debt is on the decline, thereby helping to reduce financial costs and improve profit margins.
VCBS Securities Company believes that GELEX's electrical equipment segment is benefiting in the long term from the VIII Power Plan as well as Vietnam's green energy transition.
In addition, some power construction enterprises such as PC1, TV2 on the platform will also benefit when the number of power grid projects and works is accelerated in the coming period. In 2024, PC1's revenue also skyrocketed to VND10,078 billion, while TV2's revenue increased to VND1,336 billion.
