This report is for reference only and investors should be responsible for their own investment.

02.01.2013
VietNam










































Pham Nhat Bich
(+84-8) 5413-5479
bichpham@phs.vn








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2012 El ectri c Power Update
Developing in thermo-power direction
Industry News Updated
A huge imbalance between supply-demand of power, in which supply
shortage is the major concern
Within 2007-2011, the total power capacity increased by 7.530 MW, equivalent to a gain of
nearly 2.000 MW a year, but failed to meet its average annual target of 3.000 MW. According to
experts calculation, subject to 7% average GDP growth per year, the power demand will
increase about 4,100 MW every year within 2012-2015. Meanwhile, as the statistics revealed,
the total capacity of 11 months 2012 only saw a growth of 1,912 MW compared to 2011.
Government targets to reach total capacity of 75,000 MW in 2020, however, we think this
expectation is hardly accomplished because: (i) Low current capacity: the total power capacity
nowadays is only about 26,000 MW or 35% of the target of 2020 (ii) Restriction on
Hydropower: because of the frequent water shortage in dry season from October to April every
year, the Hydropower, which currently contributes about 40% of total power supply, may not
has enough reservoir to support the capacity-enhancing project, (iii) Low technology: The loss
in the power transmission and distribution is about 15% of total productivity, which is seen as
the major cause of serious power shortage.
Hence, the power shortage cannot be solved in any time soon. As a consequence, there is still
about 1.63 TWh and 3.12 TWh needed to be imported in 2012 and 2013 respectively.
Vietnam Electricity Data And Forecasts, 2007 - 2013

2007 2008 2009 2010 2011 11T12 2012E 2013E
Net capacity, MW 12,510 13,850 15,539 18,540 20,040 21,952 22,044 26,144
Electricity output,
TWh
62.1 70.8 75.4 91.71 100.19 109.76 108.87 117.58
Electricity
Transmission &
Distribution
Losses, TWh
(7.52) (7.36) (8.75) (9.57) (10.62) (10.62) (11.44) (12.23)
Net Output, TWh 54.58 63.44 66.65 82.14 89.57 89.57 97.43 105.35
Net
Consumption,
TWh
56.46 62.6 72.9 84.56 91.36 91.36 99.06 108.47
Total Net import,
TWh
(1.88) 0.84 6.25 2.42 1.79 1.79 1.63 3.12

Source: BMI & PHS
The statistics showed that power productivity of EVN the biggest power producer and supplier
accounts for 72% of total national capacity when the other rivals, PetroVietnam and BOT
manufactories, own about 13% and 10% respectively. The rest productivity is shared by
Vinacomin and other small hydropower plants. In terms of supplying source: Hydropower
contributes 39%, coal thermo-power accounts 22.7%, and gas thermo-power occupies 36%.
Power supply structure by sources Nov/2012 Power supply structure by manufacturer

Source: PHS


Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.

Electric power selling price
The selling price of EVN is tightly supervised by Ministry of Industry (MOI) and Ministry of Finance
(MOF) and must be approved by Prime Minister. In a fiscal year, the price can only be adjusted when
the basic input costs change caused by prices of coal, gas, Diesel oil and Fuel oil, and exchange
differences of VND/USD. The intervals between two consecutive price adjustments must be more
than 3 months, the price adjustment should be equal to or more than 5% each time.
In our view, the power price will be in the uptrend because the Vietnam current electric price is lower
than other countries. On July 1
st
2012 and December 22
th
2012, power price was increasing by 5%
compared to the previous average price. Even so, the consumption power is priced now at 1,437
dong/kWh (USD 0.061/kWh) and equal to only 92% of USD 0.075/kWh in Indonesia and 71% of
USD 0.097/kWh in Thailand.
For EVN, the Groups profit FY2012 is estimated about 3.5 to 4 trillion VND thanks to (i) the
hydropower output has been very positive because the weather conditions (ii) the power demand
increased slightly. Nevertheless, this profit amount offset only of the total loss of 11,000 billion
FY2010 & 2011.
The imbalance between supply-demand is adding upward pressure on power price in near future.
MoI is planning to adjust the power price for the period from 2013 to 2015 and will submit to the
Government on December. The plan will soon be announced when it is approved by the Government.
PHS thinks that the power price will tend to increase with a slowly pace because of the Governments
inflation control policy.
Price applying subject
Selling price
(VND/kWh)
%

Price applying subject
Selling price
(VND/kWh)
%
Jul 12 Dec 12

Jul 12 Dec 12
1. Retail price for production industries

2. Retail price for irrigation
1 Power supply equal and higher than 110 kV


1 Equal and higher than 6kV


a) Normal hours 1.158 1.217 5%

a) Normal hours 1.088 1.142 5%

b) Non-busy hours 718 754 5%

b) Non-busy hours 568 596 5%

c) Busy hours 2.074 2.177 5%

c) Busy hours 1.581 1.66 5%
2 Power supply from 22 kV to 110 kV


2 Lower than 6 kV

a) Normal hours 1.184 1.243 5%

a) Normal hours 1.142 1.199 5%

b) Non-busy hours 746 783 5%

b) Non-busy hours 595 625 5%

c) Busy hours 2.156 2.263 5%

c) Busy hours 1.635 1.717 5%
3 Power supply from 6 kV to 22 kV


4. Retail price for business

a) Normal hours 1.225 1.286 5%

1 Equal and higher than 22kV


b) Non-busy hours 773 812 5%


a) Normal hours 1.909 2.004 5%

c) Busy hours 2.224 2.335 5%


b) Non-busy hours 1.088 1.142 5%
4 Power supply for less than 6 kV



c) Busy hours 3.117 3.442 5%

a) Normal hours 1.278 1.339 5%

2 From 6kv to 22kV

b) Non-busy hours 814 854 5%


a) Normal hours 2.046 2.148 5%

c) Busy hours 2.306 2.421 5%


b) Non-busy hours 1.225 1.286 5%
3. Retail price for administration units


c) Busy hours 3.338 3.557 5%
1 Hospital, day-care, preschool, primary school


3 Lower than 6 kV

a) From 6kV and higher 1.252 1.315 5%


a) Normal hours 2.074 2.177 5%

b) Lower than 6 kV 1.334 1.401 5%


b) Non-busy hours 1.279 1.343 5%
2 Public lighting



c) Busy hours 3.539 3.715 5%

a) From 6kV and higher 1.362 1.430 5%

5. Retail price for Household

b) Lower than 6 kV 1.443 1.516 5%

1
50 kWh (poor and low
income residences)
993 993 0%
3 Administration units


2 0 - 100 kWh 1.284 1.35 5%

a) From 6kV and higher 1.389 1.458 5%

3 101 150 kWh 1.457 1.545 6%

b) Lower than 6 kV 1.444 1.516 5%

4 151 200 kWh 1.843 1.947 6%

Source: EVN

5 201 - 300 kWh 1.997 2.105 5%


6 301 400 kWh 2.137 2.249 5%


7 401 kWh and higher 2.192 2.307 5%

Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.
2013 prospect
Gradually changing to market mechanism
Vietnam electric power market will be developed in 3 levels to replace the current monopoly and
subsidised power situation:
Level 1 Competitive power generation market 2005 - 2014
Level 2 Competitive wholesale market 2015 - 2022
Level 3 Competitive retail market after 2022
From July 1
st
2012, the level 1
st
has officially come to effect. There are now 29 power generation
plants (total productivity of 9,035 MW) directly offering price to EVN. For some hydropower plants
with multi-purposes (Son La, Hoa Binh, Ialy...), which goes along with other social missions like flood
fighting, irrigation..., does not give a price offer.
Hydropower Plant name Productivity Owner

Hydropower Plant name Productivity Owner

10,037


Son La 1,600 EVN

Thac Ba 120 EVN JSC
Hoa Binh 1,920 EVN

Vinh Son 66 EVN JSC
Tuyen Quang 342 EVN

Hinh River 70 EVN JSC
Quang Tri 64 EVN

Thac Mo 150 EVN JSC
Pleikrong 100 EVN

A Vuong 210 EVN JSC
Ialy 720 EVN

Ba Ha River 220 EVN JSC
Se San 3 260 EVN

Se San 3A 108 EVN JSC
Se San 4 360 EVN

Bac Binh 33 EVN JSC
Buon Tua Srah 86 EVN

Da Nhim Pha River 167 EVN JSC
Buon Kuop 280 EVN

Ham Thuan 300 EVN JSC
Srepok 3 220 EVN

Da Mi 175 EVN JSC
Tri An 420 EVN

Cua Dat 97 Local Ipp
Dai Ninh 300 EVN

Nam Chien 2 32 Local Ipp
An Khe 160 EVN

Coc Village 18 Local Ipp
Tranh River 2 190 EVN

Binh Dien 44 Local Ipp
Dong Nai 3 180 EVN

Za Hng 30 Local Ipp
Huong Dien 54 Local Ipp

Can Dan 78 Local Ipp
Con River 63 Local Ipp

Srokphumieng 51 Local Ipp
Krong Hnang 64 Local Ipp

Huong Son 34 Local Ipp
Srepok 4 80 Local Ipp

Muong Hum 30 Local Ipp
Da Dang 2 34 Local Ipp

Dak Rtih 144 Local Ipp
Se San 4A 63 Local Ipp

Small hydropower plants 300 Local Ipp
Source: EVN
On the other hand, the Ministry of Finance is composing a Circular of Power price Balance Fund
which is instruction for establishing, managing, and using the Fund. This financial fund is expected to
be used to (i) stabilize retail price and (ii) alleviate the negative influence of the rise in electric price on
consumers.
The official operation of level 1
st
is an important step of Vietnam power industry. Analysts think that
the power price will ultimately be progressed to level 3
rd
. However, the last price adjustments havent
reflected the real input costs of power production. Therefore, to follow the right progress, the price
must be reviewed and recalculated to include all expenses.
In near future, there will still be many problems as below which may delay the progress :
i) Because the lack of power generations and grids cannot be solved, and hydropower, which is
the most contribution into total power output, is still influenced deeply by weather condition, the
market is still bound to face the power shortage.
ii) Buyers always require for fully power supply and expect that the Government will continue to
subsidize the power price. The price stickiness forces the power generators unable to flexibly
react to the price change of major input elements which are sensitive to the global market
condition. The recent adjustments in power price only reflect the depreciation of VND.
iii) The market mechanism is still unfledged in utility industry. . More times is needed to transform
this market into a competitive one.

Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.
Developing in Thermo-power direction
According to the basic scenario of the 7
th
Power Planning, the overall domestic power demand is
forecasted to increase by 14-16% annually in 2011-2015, and by over 11.5%/year in 2016-2020.
On the other hand, the growth rate of total power supply in period of 2011-2015, and 2016-2020 are
at least required to reach about 14% and 10% respectively. Within these 8 years (2012-2020),
Vietnam must construct more and more power plants to add additional 53,126 MW to total capacity.
In which, the thermo sources will be highly exploited and account a higher and higher weight of total
power supply to ensure enough power for production and subsistence. In 2020, the first nuclear
power plant with the designed productivity of 2,000 MW in Ninh Thuan will officially join the operation.
Until 2030, the proportion of coal thermo-power will increase to 56.1%. Hydropower and oil-gas
thermo-power will drop to 15.3% and 12.7% respectively. Total nuclear power plants productivity will
be 10,700 MW, accounting 7.8% of the total production.
Basic scenario 2012E 2015F 2020F 2030F
Total Electricity output, bil kWh 96 187 330 695
Total Electricity output, MW 21,874 42,500 75,000 157,955
Coal thermo-power, MW 5,031 14,918 33,525 88,613
Weight 23% 35% 45% 56%
Hydropower, MW 7,875 14,280 19,950 24,167
Weight 36% 34% 27% 15%
Oil-gas thermo-power, MW 8,487 10,583 14,700 20,060
Weight 39% 25% 20% 13%
Import, MW 437 1,063 2,100 7,266
Weight 2% 3% 3% 5%
Nuclear power, MW - - 2,000 10,000
Weight 0% 0% 3% 6%
Source: Power Planning VII
Based on this developing plan, the coal demand for 2020 and 2030 will be around 78 and over 170
million tons respectively. However, according to the coal industrys production plan, the capacity only
increases by 5-8%/year and can only provide 36 million tons in 2020 and 63 million tons in 2030. The
volume of domestic coal production and imported coal, which also face to the imbalance of supply
and demand, plays a pivotal role to complete the plan.
According to the developing plan, EVN expects to build more 17 thermo-power plants until 2020. The
total capital investment in the next 20 years will be huge. However, (i) since the gloomy
macroeconomic condition may limit the funding source and (ii) as a result of the world coal output is
becoming scarce, it is hard to import large number of coal, to meet the demand, and some coal
thermo-power projects will have to reset their capacities.
We believe that the coal thermo-power projects may not be able to meet it schedule as planned.
To attract investors, the power price calculating method needs to be overhauled. Government must
consider adjusting the power price to reasonably reflect the cost and retain suitable profit to the
power industry investors.
Coal and oil thermo-power projects in 2012
Coal thermo-power 3,371 MW


Oil thermo-power 927 MW
Uong Bi 105 EVN Thu Duc 165 EVN
Uong Bi expand
rng II
330 EVN

Can Tho 33 EVN
Pha Lai 1 440 EVN JSC O Mon 1 330 EVN
Pha Lai II 600 EVN JSC

Hiep Phuoc 375
Foreign
Ipp
Ninh Binh 100 EVN JSC Bourbon 24 Foreign
Ipp
Hai Phong 1 300 EVN JSC

Source: EVN

Quang Ninh 1 300 EVN JSC
Na Duong 111 Vinacomin

Cao Ngan 115 Vinacomin
Cam Pha 600 Vinacomin

Son Dong 220 Vinacomin
Formosa 150 Local Ipp


Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.
Comment on the codes in the industry
There are now 16 power enterprises listed. In which,
11 hydropower enterprises: HJS, SJD, SBA, RHC, SEB, VSH, TBC, TIC, TMP, NLC, and DRL
3 thermo-power enterprises: NBP, PPC, and BTP
2 power distribution enterprises: KHP and VPC
Most listed companies belong to EVN Group. EVNs power productivity now is contributing 72% of
total power supply and is expected to drop to 62% as of 2015 due the diversification of power
sources generated from increasing non-EVN investment in power industry.
In this report, we mainly analyse 2 main power production groups: hydropower and thermo-power.

Co. Name

Biggest
shareholder
Listed date Today price
HJS Nam Mu hydropower JSC Hydro Song Da Group 20/12/2006 6,700
SJD Can Don hydropower JSC
Hydro
Song Da Group 25/12/2006 14,000
RHC Ry Ninh II hydropower JSC
Hydro
Song Da Group 30/06/2009 11,800
NLC Na Loi hydropower JSC
Hydro
Song Da Group 14/12/2006 13,600
SBA Ba River JSC
Hydro
EVN 01/06/2010 4,400
SEB
Middle region investment and
development JSC
Hydro
EVN 14/01/2009 22,600
VSH Vinh Son Hinh River hydropower JSC
Hydro
EVN 18/07/2006 11,200
TBC Thac Ba hydropower JSC
Hydro
EVN 19/10/2009 11,700
TMP Thac Mo hydropower JSC
Hydro
EVN 18/06/2009 11,000
DRL Power number 3 hydropower JSC
Hydro
EVN 11/01/2012 24,000
TIC Tay Nguyen power investment JSC
Hydro
Gia Lai Power JSC 12/10/2009 9,500
NBP Ninh Binh thermo-power JSC Thermo EVN 06/08/2009 13,500
PPC Pha Lai thermo-power JSC Thermo EVN 26/01/2007 8,400
BTP Ba Ria thermo-power JSC Thermo EVN 25/11/2009 5,900
KHP Khanh Hoa Power JSC Distribute EVN 27/12/2006 7,500
VPC
Vietnam Energy investment and
development JSC
Distribute EVN 18/06/2012 2,700
Hydropower enterprises
The profit of hydropower enterprises heavily depend on weather condition. The more rain there is, the
higher the profit earns. As we mentioned above, the water in hydropower reservoir increased this
year because of high rain level. The hydropower production thus saw a remarkable growth. The
revenues of the first 9 months 2012 of hydropower enterprises (TBC, TMP, SJD, TIC, and SEB)
showed a significantly growth than that of 9M2011. Besides, a higher average selling price in 9M2012
help these enterprises claim an better than expected profit.
In general, all enterprises gross margins represented at high rate and the industry average number
was around 56%. Besides, thanks to the profit from financial activities, some enterprises like TIC
(11.37x) and VSH (74%), achieved a much higher net profit margin than the industrial average (
33%).
9M2012 revenue growth compare to 9M2011 9M2012 profit growth compare to 9M2011
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
140%
160%
TBC TMP SJD TIC SEB RHC HJS NLC SBA VSH

-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
TMP TBC TIC SEB HJS SJD RHC SBA NLC VSH

Source: PHS

Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.

9M2012 gross margin 9M2012 net margin
0%
10%
20%
30%
40%
50%
60%
70%
80%
HJS SJD SBA RHC SEB VSH TBC TIC TMP NLC

0%
10%
20%
30%
40%
50%
60%
70%
80%
VSH SEB TBC SJD NLC HJS RHC TMP SBA

Source: PHS
According to National Centre for Hydro-Meteorological Forecasting, in 2012-2013, the North-East
region, Northern mountainous region, Middle Northern region and Tay Nguyen where most
hydropower plants are located will be dry and face water shortage. Especially in Middle region, the
rain level is relative low during rainy season. Hence, the water shortage and drought in this region will
be in wide scale. According to the forecast, we expect that the revenue of hydropower enterprises in
2013 will have highly likelihood to be lower compared to this year due to the declining power
productivity.
Thermo-power enterprises
Like some hydropower enterprises, NBP and BTP both have signed new power selling price contract
with EVN while their major rival, PPC, is still in discussion.
For NBP, sale and net profit from power production increased sharply by 14% and 15.4x respectively
because the new selling price has dealt with EVN at 1,045.49 dong/kWh. NBP is also the leader of
profitability with a higher than average net margin of 6. However, since 78% of total outstanding
shares are concentrating on the big shareholders, low liquidity has become major concern of NBPs
investors.
For BTP, due to the lack of input gas for the companys power production demand, its output
decreased and the revenue dropped by 39%. However, contributed by the new power contract,,
BTPs EAT increased sharply by 3.5x YoY.
On the contrary, PPC is still applying recognizing the 90% of the original selling price with EVN.
Accompany with finance expense increased significantly to 703.6 billion VND in 9M2012, in which
481 billion VND contributed by loss of exchange rate. After 9 months 2012, its EAT dropped by 74%
YoY, reaching 18.37% EBT target o 2012.
9M2012 revenue growth compare to 9M2011 9M2012 profit growth compare to 9M2011
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
NBP PPC BTP

-200%
0%
200%
400%
600%
800%
1000%
1200%
1400%
1600%
1800%
NBP BTP PPC

9M2012 gross margin 9M2012 net margin
12%
13%
13%
14%
14%
15%
15%
PPC NBP BTP

0%
1%
2%
3%
4%
5%
6%
BTP PPC NBP

Source: PHS

Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.

Summary
In long-term, to ensure the power supply for production and household, EVN will highly exploit
thermo-power sources and reduce its dependence on hydropower. This will be an advantage for coal
thermo-power plants to increase the productivity in 2013. In additional, next year will see the most
severe power shortage ever because of the abnormal dry climate condition. We forecast that the
business result of many hydropower plants next year might not be as high as this year. On the
contrary, thermo-power productivity in 2013 will be high to meet the domestic demand. However, the
power productivity in the last 6 months will be slightly declined compared to the first 6 months due to
the regular maintenance machines in next year.



Phu Hung Securities
This report is for reference only and investors should be responsible for their own investment.


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Disclaimer

This information has been compiled from sources we believe to be reliable, but we do not hold ourselves responsible for its completeness or accuracy. It
is not an offer to sell or solicitation of an offer to buy any securities. Phu Hung Securities and its affiliates and their officers and employees may or may not
have a position in or with respect to the securities mentioned herein. Phu Hung Securities (or one of its affiliates) may from time to time perform
investment banking or other services or solicit investment banking or other business for any company mentioned in this report. All opinions and estimates
included in this report constitute our judgment as of this date and are subject to change without notice.








































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