TV2 shares increase rapidly thanks to the story of expectations

The Song Hau 2 Thermal Power Project has shown positive signs, making investors expect that Power Construction Consulting Joint Stock Company 2 will benefit, pushing its stock price to a valuation far above the industry average.

In the first quarter of 2024, the profit of Power Construction Consulting Joint Stock Company 2 (PECC2 - code TV2) increased by 33.8%, to 11.36 billion VND and completed 20.9% of the profit plan of 66 billion VND in 2024. However, if looking at the data of the period 2020-2021, the profit per quarter is from over 70 to over 100 billion VND/quarter, the above profit level is still much lower.

In the context of gloomy business, TV2 stock price suddenly surged. From April 26 to June 18, TV2 stock increased by 42.98%, from VND35,250 to VND50,400/share (short-term peak on June 10 was VND53,100/share) and became one of the stocks with outstanding growth momentum on HoSE.

In fact, the time when TV2 shares increased coincided with the news that Toyo Ink Berhad Group, Song Hau 2 Power Company Limited and the Export-Import Bank of Malaysia signed a credit contract worth 980 million USD for the Song Hau 2 Thermal Power Project. At the 2024 General Meeting of Shareholders on June 14, Mr. Nguyen Chon Hung, Chairman of the Board of Directors of PECC2, shared that this helps the Company secure initial capital to implement the Project.

According to Vietcap Securities Company, the construction of the Song Hau 2 Thermal Power Project will begin in early July 2024 (if capital is arranged) and contribute a total revenue of VND 26,500 billion in the period of 2024-2028, equivalent to 70% of the Company's total revenue in this period.

Ms. Do Minh Trang, Director of Analysis at ACB Securities Company, said: “In case the capital mobilization plan is completed, PECC2 implements this project with a contract value of about 1.1 billion USD, we believe that most of the revenue will be recorded in 2025 and the profit will be recorded in the period 2026-2027. In addition, this project is implemented in the form of BOT and has an implementation period of the end of June 2024. If it is not implemented, it will be considered for termination according to regulations.”

It can be seen that the Song Hau 2 Thermal Power Project is important to PECC2's business plan and potential for profit explosion in the coming years. Although the Project is only in the capital arrangement stage, each movement of the Project brings great expectations. Therefore, when PECC2 signed a capital arrangement contract for the Project, TV2's stock price jumped sharply.

Regarding the valuation of TV2 shares, after the hot increase up to June 18, Vietcap Securities Company said that the forward P/E valuation is 39.8 times (industry average 15.9 times), the forward P/B valuation is 2.4 times (industry average is 1.5 times) and the 1-year valuation of TV2 shares is 58,300 VND/share (including the forecast for the Song Hau 2 Thermal Power Project).

Thus, the market price on June 18 of VND 50,400/share is 13.55% lower than the valuation of Vietcap Securities Company in the perfect assumption of the Song Hau 2 Thermal Power Project, so the potential for price increase is no longer too great after the hot increase.

In addition, in terms of technical analysis after the hot increase, the RSI (relative strength index) indicator tends to trade in the overbought zone for a long time above 70 points, and at the same time shows signs of decreasing again. This sends a cautious signal when TV2 stock may reverse after the hot increase.

Source: https://baodautu.vn/co-phieu-tv2-tang-nong-nho-cau-chuyen-ky-vong-d218120.html