{"id":323054,"date":"2023-05-05T02:48:59","date_gmt":"2023-05-04T18:48:59","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323054"},"modified":"2023-05-05T02:49:01","modified_gmt":"2023-05-04T18:49:01","slug":"stock-in-focus-metro-pacific-investments-corp-mpi-5-may-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-metro-pacific-investments-corp-mpi-5-may-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Metro Pacific Investments Corp. (MPI) – 5 May 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MPI<\/td><\/tr>
Company Name<\/strong><\/td>Metro Pacific Investments Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 May 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 5.85<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We currently have a Target Price of P5.85\/share on MPI<\/strong>.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Earnings for the beginning of the year came in stronger-than-expected, accounting for 27.0% of consensus estimates. Prior to the pandemic, Q1 earnings typically contribute an average of around 23 to 24% to full year results. The outperformance was driven by robust earnings gains in both Meralco (+68%) and Maynilad (71%).<\/p>\n\n\n\n

For Meralco, revenues would climb by 23% as a result of 1) increased volumes, and 2) higher pass-through charges. Total energy sales (in GWh) would rise by 2%, stemming from stronger demand in January and Feb compared to last year. Core earnings (+40%) for the segment would get a further boost from MGen, whose income of P3.7-Billion marked a 208% increase relative to 1Q 2022.<\/p>\n\n\n\n

Maynilad meanwhile, would see its topline grow by 18% owing to expansion in billed volumes (+3%), as well as the implementation of higher tariffs. Recall that in January, the MWSS approved a P3.29\/cubic meter rate hike for Maynilad customers. The segment\u2019s core income (+57%) would also benefit from lower concession amortization.<\/p>\n\n\n\n

For the tollways business, revenues would expand by 32% on the back of increased vehicle volumes YoY in both its domestic (+21%) and international (+77%) roads. Despite this however, the business\u2019 core income (+3%) would end the quarter flat owing to the higher-than-anticipated concession amortization, and the impact of financing costs from the Japex acquisition last year. Management also noted that EBITDA margins in its newer roads are not yet as strong as that of NLEX, and this therefore ended up dragging down the blended margin by 160bps. <\/p>\n\n\n\n

With the coming implementation of toll rate adjustments in May and June however, management is hoping to see an uplift in margins and profitability. Lastly, the Others segment would incur a net loss owing to LRT passenger volumes still remaining somewhat weak compared to pre-pandemic times.<\/p>\n\n\n\n

No guidance was released regarding the tender offer price of P4.63\/share. The company noted however that an independent fairness opinion is set to be released in around 2 to 3 weeks (before the stockholders\u2019 meeting).<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>