Which Vietnamese power stocks are 'safe haven' as capital flows into defensive sectors amid Middle East conflict

Investor flows are rotating into defensive Vietnamese power stocks as Middle East tensions rattle markets, with coal-fired generators emerging as relative safe havens while gas-fired names come under pressure.

VN-Index, which tracks the Ho Chi Minh Stock Exchange (HoSE), has fallen sharply since early March, dropping from nearly 1,900 points to below 1,600 on Monday before rebounding slightly on Tuesday, after President Trump in a Truth Social post wrote that "any and all military strikes against Iranian power plants and energy infrastructure" had been postponed for five days after “productive” negotiations between the warring sides.

Against this backdrop, capital has moved into defensive sectors such as electricity generation and distribution. However, gains have not been uniform across the sector.

Renewable energy, hydropower and coal-fired power stocks have posted gains. Shares of Gia Lai Electricity JSC (GEG) rose from around VND14,550 to VND16,400 ($0.62) since February 9, while REE Corporation (REE) climbed from VND60,000 to VND66,800 ($2.53) over the same period.

Gia Lai Electricity is a member unit of the TTC Group, owned by businessman Dang Van Thanh, which owns 23 hydropower, solar power, and wind power plants with a total operating capacity of nearly 800 MWp, supplying 8 billion kWh of electricity to the national grid.

Coal-fired power firms such as Pha Lai Thermal Power (PPC), Hai Phong Thermal Power (HND), and Quang Ninh Thermal Power (QTP) have risen between 9% and 12%.

REE is a diversified conglomerate associated with Nguyen Thi Mai Thanh. In the energy sector, the group owns many member units with a commercial electricity output of 11.35 billion kWh, such as Thac Ba Hydropower Plant (code: TBC), Thac Ba 2 Hydropower Plant, GE Tay Nguyen Hydropower Plant, Thac Mo Hydropower Plant (TMP), Vinh Son-Song Hinh Hydropower Plant (VSH), and Binh Thuan Wind Power Plant.

Coal-fired power plants such as Phai Lai Thermal Power Plant (PPC), Hai Phong Thermal Power Plant (HND), and Quang Ninh Thermal Power Plant (QTP) saw price increases of 9-12%.

In contrast, gas-fired power stocks have declined. Shares of PetroVietnam Power Corporation (POW) fell from about VND14,500 to VND12,750, while PetroVietnam Nhon Trach 2 Power (NT2) dropped from VND27,750 to VND25,300 ($0.96). Power Generation Corporation 3 (PGV) decreased from VND26,300 to VND24,100 apiece.

PV Power is the second largest electricity producer in Vietnam, with a total output of 16 billion kWh (2024). The corporation owns several gas-fired power plants such as Ca Mau 1 and 2, Nhon Trach 1 and 2; coal-fired power plants like Vung Ang 1; and several hydroelectric power plants such as Hua Na and Dakrinh. Of these, the majority of electricity production comes from gas and coal-fired power plants, with hydroelectric power contributing only a small percentage.

Power Generation Corporation 3 is also a major electricity producer with gas-fired power plants like Phu My and coal-fired power plants like Vinh Tan and Mong Duong. The company also has hydroelectric power plants, but their capacity is not high.

The divergence reflects the impact of rising energy prices. Higher oil prices tend to push up gas and imported coal costs, increasing input expenses for thermal plants. However, coal-fired plants are often dispatched more when gas supply tightens, supporting their utilization rates.

Early heatwave to boost power demand

According to Vietnam Electricity, total electricity production and imports reached more than 48.2 billion kWh in the first two months of the year, up 7.09% year-on-year.

Coal-fired power remained dominant, accounting for 50.97% of total output, followed by hydropower at 22.37%, renewables at 15.75%, gas-fired power at 6.86%, and imports at 4.05%.

Hydrological conditions have been relatively favorable so far, with reservoir levels equivalent to about 11.5 billion kWh of remaining capacity by end-February.

However, weather forecasts point to an earlier and more prolonged heatwave this year, raising the risk of water shortages as La Nina weakens and transitions to El Nino toward late 2026 and early 2027.

To prepare for peak dry-season demand, the National System and Market Operation Company is prioritizing domestic gas and previously imported LNG at lower prices, while potentially reducing reliance on plants that depend entirely on imported coal in order to conserve fuel. Vietnam typically imports about 30-40% of its coal needs.

Coal plants using blended domestic and imported coal, such as Vung Ang, Quang Ninh and Pha Lai, are expected to maintain stable operations.

The operator has also proposed coordinating with EVN’s regional power distributors to prepare load-shedding plans under different scenarios.

Brokerage Vietcap Securities said coal-fired power companies such as QTP and PPC could see slightly higher net profit in 2026, as stronger output may offset higher coal prices, assuming current reductions in coal dispatch are temporary.

For gas-fired firms such as NT2 and POW, Vietcap maintained a neutral outlook, noting that higher generation could partly offset rising input gas costs.