PC1 – Update – 20181113

• The results of recent bids for the third 500kV national transmission line missed our expectations. However, apart from this project, PC1 has secured new orders and will be able to raise its backlog to VND2,500bn by the end of 2018 (+92.3% vs. backlog at end-2017). In FY19F, we expect the grid erection and steel pole segments to recover but this will not be enough to offset a drop in the real estate segment. Earnings could fall next year but a robust order backlog and new real estate project should support earnings into 2020.
• Based on the softening prospects for 2019, we lower our target price from VND31,300 to VND28,400 but maintain an ADD rating on PC1.

Please follow this link for the full report