Investors looking forward to green energy stocks in 2022

With a solid financial foundation, bright prospects in the medium and long term, stocks of renewable energy companies are attracting more and more investors.
Investors looking forward to green energy stocks in 2022 ảnh 1 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 of renewable energy companies all grew significantly, Truong Thanh Energy and Real Estate 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 in recent times, such as predictions that this power source will account for the largest proportion in the total capacity of Vietnam's power sources. The commitment of the Vietnamese Government to achieve net emissions of "zero" in the recent COP26 is a great motivation for businesses to continue participating in and expanding the exploitation of renewable energy sources, namely solar power, wind power,” said Ha Duc Tung, analyst of VNDirect Securities JSC.

Bamboo Capital Joint Stock Company (BCG) has signed cooperation deals with international enterprises like Siemens Gamesa Renewable Energy, SP Group, Sembcorp Utilities. Gelex Group JSC (GEX) has established a subsidiary named Gelex Electrical Equipment JSC specialized in renewable energy listed on UPCOM.

Many enterprises have positive business results in the first nine months of 2021. Truong Thanh Energy and Real Estate JSC (TEG)’s nine-month revenue reached VND199.4 billion, up nearly 44 percent over the same period last year. The company's net profit reached more than VND19 billion, an increase of more than 2,300 percent - the highest growth rate of profit after tax among renewable energy companies.

Bamboo Capital Joint Stock Company (BCG)'s net profit in nine months reached VND701 billion, up nearly 579 percent over the same period last year. According to BCG, this growth was achieved thanks to the cash flow earned from renewable energy projects that were energized at the end of 2020.

Gelex Group JSC (GEX) earned a profit of VND1.16 trillion, up 81.3 percent, KOSY Joint Stock Company (KOS) reported VND15 billion, up 68.9 percent, Alpha Seven Group JSC (DL1) achieved VND35 billion, 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, followed by Power Construction JSC No.1 (PC1) (12.52 percent), Refrigeration Electrical Engineering Corporation (REE) 12.27 percent, Gelex Group JSC (GEX) 8.56 percent.

As for the return on asset (ROA), Refrigeration Electrical Engineering Corporation (REE) was the champion as its ROA reached 6.68 percent, followed by Power 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 in the long term.

Yuanta Securities Vietnam Joint Stock Company forecast that electricity demand will grow by 9.8 percent per year to support the expected GDP growth in the 2021-2030 period from 6.5-7 percent.

With the same opinion, Agriseco Research assesses that the electricity industry will achieve good growth this year following the recovery of the economy. In the medium and long term, thermoelectric power and renewable energy are expected to gradually replace traditional energy sources such as coal and hydroelectricity.

Under the Government's plan, the installed capacity of solar and wind power will reach 35GW and 41GW by 2045, accounting for 20 percent and 23.3 percent of the total installed capacity of power sources in the country. Thanks to the incentives on electricity generation prices, the capacity of solar power has reached 16,500 MW.

According to Agriseco Research, thanks to the application of technology and price competition among the world's turbine and solar cell suppliers, net costs, which include installation costs, management costs, operation management, repair costs, in the life cycle of renewable energy projects tend to decline sharply.

As a result, the installation costs of solar and wind power projects onshore may be cheaper than coal power projects in the next few years when the equipment market is saturated.

Meanwhile, in a recent analysis report, VNDirect Securities JSC highly valued the stocks of companies with renewable energy projects with attractive preferential feed-in-tariff (FIT) mechanism prices and low-cost development.

The government's supportive policies may facilitate wind power companies to develop in the future such as Ha Do Group JSC (HDG), Gelex Group JSC (GEG), Refrigeration Electrical Engineering Corporation (REE) and Power Construction JSC No.1 (PC1).


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