The power consumption demand in Vietnam has been steadily increasing, maintaining a high annual growth rate. According to the Power Development Plan VIII, the target for commercial electricity output is approximately 335 billion kWh by 2025 and about 505 billion kWh by 2030, equivalent to a compound annual growth rate (CAGR) of 8.8% during 2020-2030F. This sets an important premise, creating a favorable development environment for electricity businesses.
Commercial Electricity Output for 2020-20230F
(Unit: Billion kWh)
Source: EVN and Power Development Plan VIII
REE’s Strategic Shift towards Energy
REE is a diversified business conglomerate with a long history in Vietnam, operating in energy, mechanical and electrical engineering, real estate, water supply, and environmental sectors.
There has been a noticeable shift towards energy in REE’s revenue structure since 2021. In 2023, the energy segment recorded a total commercial electricity output of 10.358 million kWh, generating VND 4,801 billion in revenue and VND 1,315 billion in after-tax profit, contributing 56% to the group’s revenue and 60% to its after-tax profit.
Revenue Structure of REE for 2019-6T2024
(Unit: Percentage)
Source: Financial Statements of REE
However, this segment also experienced a significant decline, impacting REE’s business results in the first half of 2024. The main reason was the underperformance of the member companies in the hydropower segment compared to the previous year due to the influence of El Nino, which led to unfavorable hydrological conditions, along with a decrease in the average electricity selling price, resulting in reduced electricity output and profit.
Commercial Electricity Output Structure of REE
(Unit: Percentage)
Source: Business Operation Report of REE
Hydropower Expected to Make a Strong Comeback
According to the latest forecast by the National Oceanic and Atmospheric Administration (NOAA) of the United States, issued in September 2024, ENSO is likely to shift to a La Nina state in the remaining months of 2024, with a probability of about 70-80%.
Oceanic Nino Index Trend for 1950-2024
(Unit: Degree Celsius)
Forecast of ENSO Phase Probabilities for 2024-2025
(Unit: Percentage)
Source: NOAA-USA
Currently, hydropower contributes the most to the energy segment’s business results. The hydropower portfolio recorded an output of 6.173 million kWh (equivalent to 59.59% of REE’s total electricity output) in 2023. With the favorable weather outlook due to the La Nina phenomenon, increased rainfall will positively impact hydropower plants’ operational efficiency. This promises to help REE’s hydropower segment recover strongly, positively contributing to the business results in the coming quarters.
Structure of REE’s Energy Segment
Source: REE’s Annual Report
Enterprise Analysis Division, Vietstock Consulting
The Green Revolution: Leading the Way in Eco-Consciousness
With extended producer responsibility, businesses are now accountable for the collection and recycling of waste generated from their products. This shift has led to a surge in recycling demands, empowering recyclers with additional resources and presenting a unique opportunity to revolutionize waste management.
Is China’s Economy Affecting the Vietnamese Stock Market?
Vietnam and China share a deep economic interdependence, with many sectors potentially impacted by any changes in their relationship. These include aviation, tourism and service industries, agricultural exports, and building materials, to name a few.
A Bold Economic Vision: Targeting over 7% GDP Growth in 2024
The Prime Minister has instructed to prioritize sustaining economic growth while maintaining macroeconomic stability, curbing inflation, and ensuring the economy’s key balances. The aim is to achieve an annual GDP growth rate of over 7%, with the fourth-quarter growth target set at 7.5-8%.
The Road to Carbon Market: Vietnam Aims for 2029 Launch
The Vietnamese government has unveiled an ambitious plan with the draft proposal for the ‘Establishment and Development of a Carbon Market in Vietnam’. This proposal outlines a pilot phase for a nationwide carbon market from 2025 to 2028, with an official launch in 2029. The market will facilitate the trading of carbon credits, with an initial focus on nationally-certified carbon credits, and will gradually expand to include a broader range of participants and credit types. This marks a significant step forward in Vietnam’s journey towards a more sustainable future, as the country actively seeks to reduce its carbon footprint and encourage environmentally conscious practices.
“A Summit Sojourn: Prime Minister Pham Minh Chinh Embarks on a Diplomatic Journey to Laos”
At 10:45 am local time on October 8th, Prime Minister Pham Minh Chinh and the Vietnamese delegation arrived in Vientiane, the capital of the Lao People’s Democratic Republic. The visit marks the beginning of the delegation’s official engagement in the 44th and 45th ASEAN Summit and related summits.
