Multinational Investment & Development JSC's workers install a rooftop solar power system for a frozen seafood factory in Dong Thap province. (Photo: VNA)According to statistics from January last year to January this year, stocks ofrenewable energy companies all grew significantly, Truong Thanh Energy and RealEstate JSC (TEG) grew 175.59 percent, Licogi 13 JSC (LIG) rose 167.21 percent,Gelex Group JSC (GEX) gained 163.28 percent, Fecon JSC (FCN) increased 142.02 percent,Bamboo Capital Joint Stock Company (BCG) rose 141.22 percent.
"There are a few reasons why renewable energy stocks have risen sharply inrecent times, such as predictions that this power source will account for thelargest proportion in the total capacity of Vietnam's power sources. Thecommitment of the Vietnamese Government to achieve net emissions of"zero" in the recent COP26 is a great motivation for businesses tocontinue participating in and expanding the exploitation of renewable energysources, namely solar power, wind power,” said Ha Duc Tung, analyst of VNDirectSecurities JSC.
Bamboo Capital Joint Stock Company (BCG) has signed cooperation deals withinternational enterprises like Siemens Gamesa Renewable Energy, SP Group,Sembcorp Utilities. Gelex Group JSC (GEX) has established a subsidiary namedGelex Electrical Equipment JSC specialised in renewable energy listed on UPCOM.
Many enterprises have positive business results in the first nine months of2021. Truong Thanh Energy and Real Estate JSC (TEG)’s nine-month revenuereached 199.4 billion VND, up nearly 44 percent over the same period last year.The company's net profit reached more than 19 billion VND, an increase of morethan 2,300 percent - the highest growth rate of profit after tax amongrenewable energy companies.
Bamboo Capital Joint Stock Company (BCG)'s net profit in nine months reached 701billion VND, up nearly 579 percent over the same period last year. According toBCG, this growth was achieved thanks to the cash flow earned from renewableenergy projects that were energised at the end of 2020.
Gelex Group JSC (GEX) earned a profit of 1.16 trillion VND, up 81.3 percent,KOSY Joint Stock Company (KOS) reported 15 billion VND, up 68.9 percent, AlphaSeven Group JSC (DL1) achieved 35 billion VND, up 57.3 percent.
In terms of efficiency per dollar spent, Bamboo Capital Joint Stock Company(BCG) ranked first with return on equity (ROE) reaching 13.74 percent, followedby Power Construction JSC No.1 (PC1) (12.52 percent), Refrigeration ElectricalEngineering Corporation (REE) 12.27 percent, Gelex Group JSC (GEX) 8.56 percent.
As for the return on asset (ROA), Refrigeration Electrical EngineeringCorporation (REE) was the champion as its ROA reached 6.68 percent, followed byPower Construction JSC No.1 (PC1) 4.78 percent, Sao Mai Group Corporation (ASM)3.26 percent and Truong Thanh Energy and Real Estate JSC (TEG) 3.02 percent.
Many analysts forecast renewable energy stocks still have room for growth inthe long term.
Yuanta Securities Vietnam Joint Stock Company forecast that electricity demandwill grow by 9.8 percent per year to support the expected GDP growth in the2021-2030 period from 6.5-7.0 percent.
With the same opinion, Agriseco Research assesses that the electricity industrywill achieve good growth this year following the recovery of the economy. Inthe medium and long term, thermoelectric power and renewable energy areexpected to gradually replace traditional energy sources such as coal andhydroelectricity.
Under the Government's plan, the installed capacity of solar and wind powerwill reach 35GW and 41GW by 2045, accounting for 20 percent and 23.3 percent ofthe total installed capacity of power sources in the country. Thanks to theincentives on electricity generation prices, the capacity of solar power hasreached 16,500 MW.
According to Agriseco Research, thanks to the application of technology andprice competition among the world's turbine and solar cell suppliers, netcosts, which include installation costs, management costs, operationmanagement, repair costs, in the life cycle of renewable energy projects tendto decline sharply.
As a result, the installation costs of solar and wind power projects onshoremay be cheaper than coal power projects in the next few years when the equipmentmarket is saturated.
Meanwhile, in a recent analysis report, VNDirect Securities JSC highly valuedthe stocks of companies with renewable energy projects with attractivepreferential feed-in-tariff (FIT) mechanism prices and low-cost development.
The government's supportive policies may facilitate wind power companies todevelop in the future such as Ha Do Group JSC (HDG), Gelex Group JSC (GEG),Refrigeration Electrical Engineering Corporation (REE) and Power ConstructionJSC No.1 (PC1)./.
VNA
