Renewable energy companies thrive on rising demand

VNS
In the first half of 2021, renewable energy projects, especially solar power, brought great profits to investors, boosting the sector's stocks.
Renewable energy companies thrive on rising demand ảnh 1 Solar power in Dau Tieng Lake in Tay Ninh Province. (Photo: SGGP)
Bamboo Capital JSC (BCG)’s second quarter financial result showed that its net revenue rose nearly 56 percent year-on-year to VND814.3 billion (US$35.8 million), resulting in profit after tax of VND315.56 billion, over 16.8 times higher than the same period last year. 

In the first half of this year, the company’s net revenue reached VND1.4 trillion, up 59.7 percent, with the profit after tax of VND478.3 billion, 17.6 times higher than last year.

In 2020, Vietnam completed and successfully connected more than 100,000 rooftop solar power systems to the national grid, Pham Minh Tuan, CEO of BCG Energy Joint Stock Company (BCG Energy), a subsidiary of BCG, told tinnhanhchungkhoan.vn. The rooftop solar power segment has great potential in the near future on the rising demand for electricity.

BCG Energy will continue to carry out many renewable energy projects to reach the target of 2.0 GW by 2023, while diversifying its investment portfolio with floating solar, wind power and liquefied natural gas to power projects in the future.

In early August, BCG Energy and SP Group (Singapore Power Group), entered into a joint venture to invest in the field of rooftop solar power in Vietnam, with the goal of reaching a capacity of 500 MW of rooftop solar power by 2025. The joint venture also announced the first rooftop solar power project on the factories of Vinamilk. 

Sao Mai Group Corporation (ASM) also said that its two solar power plants are sources of stable revenue and high profits of the company.

During the Covid-19 pandemic, as many industries face difficulties, solar power is still profitable with no payment risk and simple operation management.

With high net profit margin, which is not less than 40 percent of revenue, the solar power sector contributes nearly VND1 trillion to ASM each year in revenue and nearly VND400 billion in profit.

In the near future, Sao Mai will put the project of solar power exploration on the premises of the enterprise's factory in An Giang into operation and implement the agricultural project under the solar panels.

In the first half of 2021, Sao Mai posted consolidated net revenue of nearly VND6.3 trillion, with profit after tax of VND252 billion.

Sao Mai has just received nearly VND167 billion funded by the Japanese Government after Sao Mai - An Giang Solar Power Plant (phase 3-4 with capacity of 106 MW) participating in the JCM program managed by the Ministry of Environment, Government of Japan, to reduce greenhouse gas emissions over 17 years.

This is the first land-based solar power plant in Vietnam to receive a grant under the JCM program.

Meanwhile, during the first six months of the year, Truong Thanh Development and Construction Investment JSC (TTA) recorded a growth of 95.2 percent in net revenue to nearly VND331.1 billion. Its profit after tax reached VND76.7 billion, up nearly 82 percent over last year.

In its statement to the Sate Securities Commission of Vietnam, the company said that the growth was contributed by revenues from two new plants, including Pa Hu Hydropower Plant, starting operation in the fourth quarter of 2020, and Nui Mot Lake Solar Power, on air in January 2021. 

Moreover, the weather conditions as well as the transmission system are more favorable compared to the same period last year.

Phuong Mai wind power plant invested by Truong Thanh was put into operation in the second quarter of 2021.

The company determined to boost the development of solar and wind power projects. Its General Meeting of Shareholders in 2021 approved the policy of conducting surveys, preparing to invest in three solar power projects, three wind power projects and pumped storage hydropower project. All these projects are deployed in Ninh Thuan Province.

Of which, Truong Thanh is particularly interested in Phuoc Hoa pumped storage hydropower project with a capacity of 1,200 MW.

In 2021, it plans to achieve a revenue of VND680 billion and a profit after tax of VND150 billion.

Renewable energy companies’ shares rise

Over the month, renewable energy stocks have all surged. For example, BCG shares climbed from VND12,000 per share on July 27 to VND16,950 on August 27, up 41.25 percent. Similarly, ASM shares rose by 6.8 percent, from VND13,150 to VND14,050 per share.

HID shares of Halcom Vietnam inched 10.3 percent higher during the period. Halcom has just issued a resolution of the Board of Directors on increasing the ownership rate at VKT - Hoa An Solar Plant JSC.

LIG shares of Licogi 13 JSC jumped by 17.4 percent. It has just approved the transfer of 100 percent of capital in Quang Tri Solar Power Company Limited to VN Green Holdings, a unit from Singapore. The transfer is worth more than VND456 billion.

Nguyen Huu Quang, Director of Clean Investment of Dragon Capital, said that the dividend rate can be from 9 to 10 percent each year if investing in renewable companies. Vietnam’s renewable electricity sector is attracting large capital inflows from abroad.

Currently, a hydroelectric project has an investment period of 3 - 5 years and a thermal power project takes nearly 10 years, while it takes less than a year for solar power plant with a capacity of 50 - 10 MW to be put into operation.

Renewable energy is a field with almost no risk of market fluctuations, demand as well as exchange rates, Quang added.

Developing renewable energy is an inevitable trend of the world, while the electricity demand in Vietnam keeps rising, promising a brighter future for the industry.

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