GAS shares look to liquefied gas market for growth

GAS was one of the rare production-oriented firms to rank among the most profitable oil and gas companies in Vietnam in the first half of 2025, posting a pre-tax profit of VND 9.41 trillion, up 27% year-on-year. This robust growth came despite a broad decline in energy prices, propelling GAS to 12th place on the list of Vietnam’s 20 most profitable companies.

The company achieved these results during a turbulent period for the global energy market. The average Brent crude price dropped to $71.8 per barrel—only 85% of the price in the same period last year. Spot LNG prices, coal, and other input gases also declined. Meanwhile, gas supply to power plants and overall gas demand across the domestic market saw notable reductions.

Despite these headwinds, GAS maintained profitability thanks to a shift in revenue structure and a portfolio of long-term contracts. Its primary growth engine was the LPG and LNG segment, where revenue rose by nearly VND 7 trillion, or 12% year-on-year. In addition, GAS continued expanding into other service areas: revenue from gas services for industrial zones and fertilizer plants grew 15%, while gas transportation services rose 18%—indicating a strategic transition away from reliance on traditional core businesses.

According to SHS Securities, GAS currently plays a leading role as Vietnam’s top LPG producer, importer, and distributor—holding 70% of the domestic wholesale market and 9% of the retail market. Internationally, the company supplies over 65% of Cambodia’s LPG demand. Through its subsidiary, PVGas Trading, GAS has been exporting LPG to Cambodia since 2010. Vietnam’s geographic proximity and shared land border give it a logistics advantage over regional competitors.

In recent years, LPG demand in Cambodia has grown steadily due to economic expansion, urbanization, and industrialization. The country's energy consumption pattern is shifting from traditional fuels like firewood to LPG. GAS is positioned as a key player in this transition, especially in the LNG segment, which is expected to replace declining domestic natural gas supplies while contributing to Vietnam’s energy security.

Power Sector and LNG: A Growing Opportunity

Electricity demand in Vietnam is projected to grow 8–9% annually from 2025 to 2027. Hydropower capacity has reached saturation, and domestic coal reserves are dwindling. Additionally, many coal-fired projects have been shelved or canceled in alignment with Vietnam’s commitment to Net Zero 2050. In this context, LNG will play a crucial role as a flexible backup source—especially for southern Vietnam—in the latter half of 2025 and potentially as a primary fuel source from 2026 onward under high-load scenarios.

GAS is well-positioned to capitalize on this shift thanks to its existing infrastructure. The Thi Vai LNG terminal has already signed a 25-year supply contract with Nhon Trach 3 & 4 power plants, ensuring stable offtake and mitigating capital recovery risks. Moreover, the terminal can also offer infrastructure services beyond direct LNG distribution to power plants.

The Nhon Trach 3 and 4 power projects are more than 98% complete and are scheduled to begin commercial operations in October and December 2025. As the main LNG supplier, GAS is expected to benefit directly from the upcoming surge in demand for gas-based power generation.

Looking ahead, the Block B gas field—with an estimated reserve of 107 billion cubic meters—is set to begin production by late 2027, gradually reaching a stable output of 5 billion m³/year by 2030. This volume is substantial enough to offset declines from existing fields. For GAS, this project could boost gas volumes for processing and distribution by 70–80%, providing significant upside in long-term revenue and profit. With long-term gas purchase agreements in place, the company’s profitability will be less exposed to spot LNG price volatility. While investment pressure may limit short-term growth, the outlook from 2027 onward looks structurally stronger.

Outlook for 2025: Mixed Short-Term Picture

SHS projects that Vietnam’s dry gas supply (including LNG) in 2025 will likely underperform 2024 due to faster-than-expected depletion at existing gas fields. Meanwhile, the gross margin in the LPG segment is forecast to decline further in the second half of 2025—down 7.2% year-on-year. This margin compression is attributed to higher-than-expected LNG import prices, following a recent adjustment by the Ministry of Industry and Trade.

However, GAS’s bottom line will be supported by a reversal of provision expenses, helping reduce administrative costs.

SHS forecasts GAS’s 2025 revenue to reach VND 107.39 trillion (up 3.7% year-on-year) and post-tax profit to hit VND 11.57 trillion (up 9.2%). Applying a discounted cash flow (DCF) valuation model, SHS maintains a positive rating on GAS shares with a target price of VND 72,500 per share for 2025.