The reopening of the economy helps to increase electricity consumption nationwide. At the same time, prices in the competitive electricity generation market (CGM prices) also increased.

In a favorable context, electricity enterprises have had very positive business results, especially hydropower enterprises. Analysts also believe that, in the context of rising coal and gas prices, combined with the shortage of coal, hydropower enterprises will continue to benefit in the second quarter of 2022.

“Bright star” of the electricity industry

According to SSI Securities Joint Stock Company, the average CGM price in the first quarter of 2022 is 1,515 VND per kWh, up 37% over the same period in 2021.

The competitive electricity generation market has been built since the beginning of 2019, aiming to introduce a design model of the electricity retail market in line with international practices, allowing customers to choose and change suppliers. electricity, ensuring the retail price of electricity is transparent and accurately reflects the cost…

However, for the whole year, the CGM price is predicted by SSI to increase only 30%, about 1,300 VND per kWh. The above assumption is lower than the average in the first quarter of 2022 because the La Nina phenomenon (lower sea temperature, causing many storms) may return in the second quarter.

In the system of power plants, hydropower plants have lower average costs and selling prices than thermal power plants. Increased output from hydroelectricity could cool CGM price gains. However, SSI still noted that if the demand for electricity increases sharply, the price movement of CGM may still be favorable.

Regarding electricity consumption, SSI said that if the price of oil, gas and thermal coal continues to increase, high inflation pressure and global economic growth may slow down, which will make Vietnam’s exports and GDP growth worse. The South is affected, thereby leading to a decrease in electricity consumption.

In the worst-case scenario, if Vietnam’s GDP growth is about 5-6%, the national electricity consumption growth will be about 7%. If GDP increases by 6-7%, electricity consumption will increase by 9.2%.

According to KIS Vietnam Securities Joint Stock Company, in the first quarter of 2022, total electricity production increased slightly by 4.9% over the same period last year to 63.03 billion kWh thanks to the strong recovery of the economy. .

According to estimates of KIS Vietnam, the total revenue of 38 power enterprises increased by 16.3% over the same period last year, while the profit after tax of the parent company increased spectacularly by 69.9% over the same period last year. advance thanks to favorable volume and selling price; in which, hydropower companies are the main contributors to growth, when profit after tax of the parent company reached a record growth of 108.1% over the same period last year.

Vinh Son – Song Hinh Hydropower Joint Stock Company (stock code: VSH) rose to the top of the hydropower industry with impressive revenue growth, up 325% over the same period in 2021.

KIS Vietnam believes that hydropower will benefit from the coal shortage crisis in the second quarter of 2022. According to the Electricity of Vietnam (EVN), the whole system is short of 3,000 MW of coal power when the peak season is coming very close.

The proportion of imported coal in the amount of coal supplied by Vietnam National Coal-Mineral Industries Group (Vinacomin) to power plants increased in the context of a sharp increase in world coal prices putting pressure on the selling price of coal power.

Although gas prices are on an upward trend, KIS Vietnam believes that EVN will increase the mobilization of gas thermal power along with hydropower to make up for the shortfall in coal power.

In the context of rising coal and gas prices, combined with a coal shortage, hydropower companies in the central region have emerged as the “shining stars” of the power industry.

Rainfall in the Central Highlands – South Central region in the second quarter of 2022 is forecasted to be higher than the average of previous years. This will promote the growth of hydropower companies in this area such as: Vinh Son – Song Hinh Hydropower Joint Stock Company (stock code: VSH), Gia Lai Electricity Joint Stock Company (stock code: GEG) and Da Nhim – Ham Thuan – Da Mi Hydropower Joint Stock Company (stock code: DNH).

Previously, in the first quarter of 2022, Vinh Son – Song Hinh Hydropower Joint Stock Company (stock code: VSH) rose to the No. 1 position in the hydropower group when revenue and profit after tax increased by 325% and profit respectively. 298% over the same period last year, thanks to the operation of Thuong Kon Tum hydropower plant, leading to a spectacular increase in output of 620 million kWh, equivalent to an increase of 173% over the same period last year.

Da Nhim – Ham Thuan – Da Mi Hydropower Joint Stock Company (stock code: DNH) with the second highest revenue in the group also maintained a revenue growth rate of 22% over the same period last year, when The flow of water into the reservoirs of the plant continues to increase.

Gia Lai Electricity Joint Stock Company (stock code: GEG) returned to the leading position when revenue growth reached the highest level in history, up 87% over the same period last year, because of wind power projects. The company’s new company has started operating from the fourth quarter of 2021.

KIS Vietnam said that the electricity industry’s gross profit margin peaked in the first quarter despite rising input fuel prices. The gross profit margin of hydropower companies hit a record 63.1% in the first quarter of 2022, up 8.3 percentage points from the same period last year and 2.6 percentage points from the previous quarter. there.

Better-than-expected business results have helped hydropower companies complete from 28-40% of revenue targets in 2022.

Thermal power faces many challenges

Although thermal power companies still saw strong growth in revenue and profit in the first quarter, analysts believe that thermal power companies will face many challenges in the coming time.

In the first quarter, the price of Newcastle coal and FO Singapore oil (the reference price of the gas price of Vietnam Gas Corporation- JSC (PVGAS – stock code: GAS) supplied to domestic power plants increased by 187% and 49% over the same period last year.

However, the sharp increase in electricity selling price also helped offset the negative impact from the increase in fuel prices, when the gross profit margin of thermal power companies expanded by 3.7% year-on-year and 4.8% year-on-year. .1% compared to the previous quarter.

KIS Vietnam forecasts that rising gas prices may hurt the gross profit margin of gas power companies in the second quarter of 2022. Along with that, due to the shortage of coal supply along with the increase in world coal prices due to political tensions, KIS Vietnam believes that coal power companies will face difficulties in the second quarter of 2022. The gross profit margin of companies is likely to decline in the second quarter of 2022.

In the group of thermal power plants, Power Generation Corporation 3 – JSC (stock code: PGV) is the company with the largest revenue with revenue and profit after tax increasing by 19.3% and 6.8% respectively compared to that of thermal power plants. same period last year. Thanks to its diversified portfolio, the company can increase mobilization from Phu My Gas Power Plant and Buon Kuop Hydropower Plant while its coal power plants are operating below capacity.

PetroVietnam Power Corporation – JSC (stock code: POW) and its subsidiary Nhon Trach 2 Petroleum Power Joint Stock Company (stock code: NT2) are outstanding businesses when the following profits are made. tax increased sharply, respectively 41.8% and 39.2% over the same period last year.

However, the revenue of PetroVietnam Power Company – JSC decreased slightly by 7.8% compared to the same period last year when Vung Ang 1 coal power plant (usually contributes more than 50% of the revenue of the business) underperformed. effective in the first quarter of 2022 due to lack of coal.

In the coal power group, Hai Phong Thermal Power Joint Stock Company (stock code: HND) had a positive revenue growth, up 27.6% y/y, thanks to the improvement in selling price and output as output increased by 265 million kWh; in which, contract output with EVN increased by 121 million kWh over the same period last year.

Quang Ninh Thermal Power Joint Stock Company (stock code: QTP) and TKV Electricity Corporation – JSC (stock code: DTK) also had positive revenue when increasing 44.9% and 10.6% respectively over the same period. period last year.

In contrast, PPC’s revenue fell by 0.2% y/y as output dropped 6.7% due to a technical problem at unit S6 that had not yet been rectified.

PetroVietnam Securities Joint Stock Company (stock code: PSI) said that thermal power faces many challenges when the world oil price increases sharply, leading to the price of gas supplied to factories.

According to PSI Securities, if the geopolitical situation remains tense, the increase in oil prices will not stop causing the gas price sold to power plants to also increase, the gross profit margin of power and gas enterprises may continue. negatively impacted.

Besides, coal-fired power enterprises also face similar difficulties when fuel supply is tight and selling price is high.

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