Positive outlook from the electricity sector
According to the analysis report of DSC Securities Corporation on the prospects of PC1 Group Corporation (HOSE: PC1), PC1 currently owns a hydropower portfolio with a total capacity of up to 169MW. In the first 6 months of 2024, the enterprise produced 184 million kWh, nearly double that of the same period in 2023.
DSC Securities believes that PC1's hydropower is positive thanks to the La Nina phenomenon. According to the Hydrometeorological Directorate, hydrology has officially entered La Nina status after July 2024. This trend will have a positive impact on PC1's energy segment as the company owns 169MW of hydropower in the Northern region.
The company continues to expand its hydropower plant capacity with plans to start construction of Bao Lac A (30MW) and Thuong Ha (13MW) hydropower plants in 2024 and is expected to complete by the end of 2025, bringing the total capacity of PC1's hydropower plants to 212MW. It is expected that these two hydropower plants can contribute an additional 25% of available hydropower output from 2026.
PC1 also actively participates in key projects in the national power system, including the 500kV line and transformer station project, circuit 3; the 500kV Quang Trach - Pho Noi line project with a contract value of VND 2,100 billion, including construction and supply of equipment and materials.
With prospects from the electricity industry and electricity construction activities, DSC Securities forecasts PC1's revenue and after-tax profit in 2024 to reach VND 10,049 billion and VND 648 billion.
“The growth momentum comes from the power construction sector continuing to recover, escaping the low period; costs will gradually decrease after the FED loosens monetary policy; output from hydropower plants recovers and contributions from the Yen Phong 2 industrial park real estate project of Western Pacific,” DSC Securities experts analyzed.
Civil real estate entangled in legal issues, expectations for industrial park real estate
In the real estate sector, residential real estate revenue is expected to remain low this year due to delays in implementation of many projects facing legal problems, including Dinh Cong, Vinh Hung, Thang Long, and Yen Thuong. For these projects, the development and handover period is forecasted to fall between 2025 and 2028.
However, in the second quarter of 2024, PC1 successfully auctioned a low-rise housing project in Thap Vang, Gia Lam, Hanoi. The project is expected to start construction in 2024 because it has all legal documents, and is expected to be handed over in 2025 - 2026, with total revenue estimated at VND 1,500 billion and net profit of VND 400 billion.
Regarding the industrial park real estate segment, according to information from the 2023 General Meeting of Shareholders, PC1 committed to the goal of developing more than 1,500 hectares of industrial park real estate by 2033 with an internal rate of return of over 20%. This land fund includes projects that the company develops itself such as Nomura Industrial Park and projects that the company indirectly invests in through its affiliate, Western Pacific.
In particular, the company is currently preparing to invest in Nomura Industrial Park phase 2, expecting the project to contribute profits to PC1 from 2026.
For indirect investment projects, Western Pacific - an associate of PC1 with a 30% ownership ratio - is expected to continue to hand over and record revenue from Yen Phong 2A Industrial Park. Western Pacific also plans to invest 100% in a 600ha industrial park in Ha Nam province. The project is expected to start construction in 2024 and be operational from 2026.
