Power and gas enterprises benefit directly
Immediately after the news of the increase in electricity prices from May 10, many securities companies issued updated reports assessing the impact on the market. According to the analysis, the group that benefits is clearly the gas enterprise - which has input costs that are trending down while output prices are adjusted up.
Mirae Asset Vietnam Securities Company believes that gas plants will improve profit margins thanks to the difference between reduced gas prices and increased electricity prices. POW (Vietnam Oil and Gas Power Company) and NT2 (Nhon Trach 2 Power Company) are two prominent enterprises in this group.
In the newly released report, VNDIRECT continues to maintain a "positive" recommendation to POW, assessing the potential for a 16.5% price increase. This unit believes that the strong increase in electricity consumption demand will support long-term growth, especially when Nhon Trach 3 and 4 projects come into operation.
Yuanta Vietnam also agreed when it said that businesses such as POW, PGV, NT2, QTP with stable PPA contracts will continue to benefit. Electrical construction groups such as PC1 and TV2 also have positive prospects in the context of increasing demand for electricity infrastructure investment according to selling prices.
Cost pressure on the manufacturing industry
While the electricity and construction groups benefit, many manufacturing industries face the risk of falling profits due to increased electricity prices. A report by BIDV Securities Company (BSC) clearly shows that electricity accounts for a large proportion of costs in a series of key industries. Accordingly:
Chemicals: account for 25-35% of cost of capital;
Cement: accounts for 12-15% of cost of cost;
Fertilizer: accounts for about 10-15% of cost of capital;
Plastic: accounts for 2-3% of cost of capital;
Steel (high grade): about 2% cost of cost.
These are all industries that use electricity continuously, in large volumes, and often have thin profit margins. The increase in input electricity prices while selling prices are difficult to adjust due to weak demand and supply will create a "double stack" for business efficiency. Many businesses are struggling to escape the period of high input costs due to raw material prices, now continuing to bear additional pressure from electricity costs.
In addition, some industries such as seafood, textiles, and food processing, although the electricity ratio is not high, but fierce competition with imported goods also makes it difficult for domestic enterprises to have the opportunity to increase selling prices to cover arising costs, leading to the risk of a profit reduction in the second quarter and the whole year of 2025.
Not only that, the increase in electricity prices also poses a long-term requirement for manufacturing enterprises to invest in energy-saving technology, use renewable energy, or improve production processes - things that require large investment capital and are difficult to implement immediately.
EVN reduces losses, cash flow of the power chain is released
An important impact of increasing electricity prices is the ability to improve cash flow for EVN - a group that is suffering a loss of tens of thousands of billions of VND from 2022-2023. According to MB Securities Company (MBS), this increase in electricity prices will help EVN narrow the deficit, ensure more even payment for power plants, thereby improving the operational efficiency of the entire chain.
MBS emphasized that the increase in electricity prices also supports investment in transmission - distribution and new energy projects, especially in the context of increasing electricity demand every year but the additional new power generation capacity is behind schedule.
From a market perspective, many experts believe that adjusting electricity prices according to market mechanisms is a positive signal for the long-term investment environment in the energy industry. This creates a basis for electricity enterprises, especially those that have been equitized or listed, to have more resources to expand investment.
However, the reports also recommend that investors should carefully choose businesses with good financial foundations, clear projects, and reasonable fuel costs, avoiding chasing short-term expectations when stock prices fluctuate strongly.
