PV Power to launch 1st capital raise since 2018 to fund LNG expansion

PV Power, a subsidiary of state-owned giant Petrovietnam, is preparing for its first capital hike since going public in 2018, boosting its charter capital by nearly 30% to fund two landmark LNG power projects.

As Nhon Trach 3 and 4 LNG power projects in the southern province of Dong Nai approach commercial operation, the company is set to hold an extraordinary general meeting of shareholders (EGMS) on September 25 to seek shareholder approval for the VND7.26 trillion or $275.2 million (nearly 30%) capital increase, from VND23.42 trillion to VND30.68 trillion ($404.8 million).

This includes an offering of 281 million shares (12%) at VND10,000 ($0.38) per share to existing shareholders, a 15% bonus share issuance (351.3 million shares), and a 4% share dividend.

From the date of shareholder approval until early November, PV Power will submit documents to the State Securities Commission (SSC) to register the share offering and request a certificate. Subsequently, the company will distribute the shares to shareholders, complete post-issuance procedures, and finalize the capital raise by February 7, 2026.

This capital raise forms part of PV Power’s broader strategy to strengthen its financial position and support Vietnam’s growing energy demands.

Several major state-owned enterprises such as Binh Son Refining and Petrochemical (BSR) and Airports Corporation of Vietnam (ACV) have raised capital this year, and they did so entirely from retained earnings. In contrast, PV Power's capital expansion includes both retained earnings and new cash contributions from shareholders.

Holding a 79.94% stake in PV Gas, wholly state-owned Petrovietnam will need to contribute approximately VND2.25 trillion ($85.28 million), underlining the importance of PV Power’s role in executing key national power projects, especially LNG-based plants.

According to PSI Securities, amid declining domestic gas supply, LNG power is becoming an essential solution to meet Vietnam’s growing electricity demand, projected to rise 10.3-12.5% annually. This aligns with Vietnam’s GDP growth target of over 8% by 2025 and 10% annually on average during 2026-2030.

PV Power is currently investing in two flagship projects in Dong Nai: Nhon Trach 3 and Nhon Trach 4, the country’s first LNG-fired power plants, with a total investment of approximately $1.4 billion.

By the end of Q2/2025, 99% of the EPC (engineering, procurement, construction) work for both plants had been completed. Key infrastructure, such as the 26.5 km NT3–Long Thanh transmission line, has already been finished.

To ensure fuel security and investment efficiency, PV Power signed a 25-year LNG supply contract with PV Gas (GAS), another member of Petrovietnam, starting in 2025. Power Purchase Agreements (PPAs) with state utility Vietnam Electricity (EVN) have also been finalized.

In this capital increase, the company expects to raise VND2.81 trillion ($106.5 million) from the rights offering to finance Nhon Trach 3 and 4, particularly for payments to contractors and partners.

PSI Securities said it believes this equity injection will not only strengthen PV Power’s financial capacity but also position it to secure additional loans in the future.

Strong profit recovery

PV Power is the fourth-largest electricity producer in Vietnam, with a total installed capacity of 4.2 GW, representing 10% of the country’s total.

Its gas-fired plants, including Ca Mau (1,500 MW), Nhon Trach 1 (450 MW), and Nhon Trach 2 (750 MW), account for 64% of its total capacity. The rest comes from coal (Vung Ang, 1,200 MW) and hydropower (Hua Na, 180 MW; Dakdrinh, 125 MW).

While revenue has grown, PV Power’s net profit declined in 2023 and 2024. In H1/2025, revenue increased 12.3% year-on-year to VND17.54 trillion ($664.83 million), and gross profit margin improved from 7% to 11.3%, pushing net profit to VND1.23 trillion ($46.62 million), a jump of 87%, equivalent to the full-year results of 2023-2024.

This improvement was driven mainly by hydropower, boosted by favorable weather conditions, and a slight recovery in coal-fired power output, offsetting volatility in gas power production.

Meanwhile, KB Securities forecasts continued growth in hydropower revenue and profit in H2/2025 due to ongoing favorable weather. Additionally, the Ministry of Industry and Trade is proposing amendments to Decree 72, which would allow retail electricity prices to be accounted for in production costs.

This could improve EVN’s cash flow, allowing it to settle past debts and foreign exchange (FX)-related receivables owed to power producers like Nhon Trach 2 (NT2) - a PV Power subsidiary. This could result in one-time income worth hundreds of billions of VND (VND100 billion = $3.79 million).

Meanwhile, Nhon Trach 3 and 4, launched in February 2023, are nearing commercial operation. Nhon Trach 3 connected to the national grid in February, and Nhon Trach 4 generated its first power from imported LNG in June. PV Power expects both plants to begin commercial operation in September and November 2025, respectively.

PSI Securities believes these two plants will be key growth drivers, contributing 9 billion kWh annually (capacity of 1.6 GW). According to company forecasts, under current operating conditions, Nhon Trach 3 and 4 will begin contributing profit to the group by 2027.

However, to finance its projects, PV Power’s financial debt has surged over the past two years. From just VND9 trillion at the end of 2022, total debt soared to VND27.9 trillion ($1.06 billion) by Q2/2025, a threefold increase.

Of particular concern is the spike in USD-denominated debt, which rose from VND4.93 trillion at the start of 2025 to VND12.5 trillion ($473.8 million) in H1/2025, putting significant pressure on the company amid rising exchange rates.

In 2024, PV Power reported VND203 billion in FX losses, 2.3 times higher than in 2023. In just the first half of 2025, FX losses reached VND315 billion ($11.94 million), up 69%.

Amid strong business performance and positive project outlook, the firm’s stock, POW, surged from VND11,200 per share in early April to VND16,500 ($0.63) in mid-August, its highest level in three years. It has since corrected in line with the broader market to around VND15,300 per share.