What will give impetus to POW?

POW is not only receiving exchange rate difference compensation but also boasts large-scale LNG projects to spearhead the wave of gas-fired power investments in the coming years.

Positivity outweighs caution

As of 13 July, POW had not yet released its Q2 2026 earnings report. However, according to forecasts by MB Securities (MBS), based on actual power output amid surging electricity demand due to extreme heatwaves, power companies have significant opportunities to accelerate their business performance.

Standing out within the power sector, MBS assessed that POW would have positive Q2 business results. Accordingly, the profit after tax of the parent company is forecast to reach approximately VND 3,002 billion, a sharp increase compared to the same period last year and the previous quarter. If this forecast materialises, it will be the company with the highest profit growth amongst the power companies tracked by MBS.

In Q1 2026, POW recorded its consolidated revenue of VND 12,281 billion, up 47% compared to Q1 2025 and exceeding the quarter's target by 11%. Its pre-tax profit reached approximately VND 923 billion, an increase of nearly 79% year-on-year.

Despite this, POW remains rather cautious in its business plans, with estimated 2026 output exceeding 21.6 billion kWh, up 16% year-on-year, and a total target revenue of nearly VND 50 trillion, up 41%. However, targeted pre-tax and post-tax profits are only nearly VND 1.33 trillion and over VND 1.12 trillion, respectively, representing declines of 59% and 33% compared to 2025 actuals. The company explained this cautious approach by stating that the business plan was formulated in a context requiring careful assessment of influencing factors, particularly the increasingly erratic and unpredictable El Niño phenomenon. Thus, the initial results and forecasts suggest a rather 'favourable time and place' for POW.

Unexpected exchange rate compensation

At present, POW is shining with favourable business prospects and also a 'nest egg' in the form of expected exchange rate compensation. Specifically, according to BSC, POW's business prospects in 2026 are significantly improved thanks to a combination of favourable factors, including a prolonged El Niño cycle, high electricity prices in the competitive generation market (CGM), increased thermal power output, and especially an expected exchange rate difference compensation of around VND 1,600 billion from EVN. BSC's analysts evaluated that the El Niño cycle will contribute to growth for the thermal power group, including POW. On this basis, increased electricity prices will improve the company's gross profit margin for the power segment. Alongside this, stable input fuel sources for key power plants and increased power generation output from new plants will help POW enhance its operational efficiency.

Regarding the exchange rate compensation, POW is working with EVN to finalise the recognition of the exchange rate difference related to the Vũng Áng 1 Power Plant. Simultaneously, it continues to negotiate PPA contract appendices for Nhơn Trạch 3 and 4 under the new mechanism.

“In our new forecast, we have factored in the estimated exchange rate difference income of VND 1,600 billion from EVN into the 2026 projections, expected to be recognised directly in Q2 2026, thereby strengthening the company's operating cash flow. This exchange rate compensation contributes 51% to the projected increase in EVN's overall net profit, providing robust actual cash flow right in the 2026 financial year,” stated BSC.

Besides, POW also benefits from its portfolio of large-scale LNG projects, comprising LNG Quảng Ninh, LNG Quỳnh Lập, LNG Cà Mau 3, and Nhơn Trạch 5. It holds a favourable position, ready to spearhead the wave of gas-fired power investments in the coming years in line with the national power sector development orientation.

In other words, both short-term factors and long-term advantages are making POW a bright spot amongst power companies/stocks from 2026 onwards. BSC maintains a 'buy' recommendation for POW shares with a target price of VND 18,500/share, equivalent to a 25% increase from the closing price on 6 July 2026, based on the discounted cash flow method.

Nevertheless, no business has purely positive prospects. The risks for POW, as cautiously considered by the company itself when formulating its business plan, involve climate change-related phenomena, specifically the increasingly erratic and unpredictable nature of El Niño. Alongside this, in 2H2026, its plants often enter short-term maintenance cycles. These will be particular factors regarding El Niño; should fluctuations occur, their impact will be difficult to gauge and require close monitoring.