{"id":323098,"date":"2023-05-09T08:03:39","date_gmt":"2023-05-09T00:03:39","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323098"},"modified":"2023-05-09T08:04:20","modified_gmt":"2023-05-09T00:04:20","slug":"stock-in-focus-acen-corp-acen-9-may-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-acen-corp-acen-9-may-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: ACEN Corp. (ACEN) – 9 May 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>ACEN<\/td><\/tr>
Company Name<\/strong><\/td>ACEN Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>9 May 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 7.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

While the first quarter numbers show a marked improvement from last year and the company\u2019s revenues of P9.1-Billion beat forecasts by 5.1%, ACEN\u2019s bottom line missed expectations by 23.2%. We are primarily concerned about how increased borrowing costs are impacting ACEN\u2019s earnings, especially considering that the company plans to borrow an additional P30-Bn this year to fund its renewable expansion. We are also seeing some growing pains in the General and Administrative Expenses side, with costs ballooning by 229% due to the consolidation of the Australian accounts and increased manpower count, which are expected to be recurring moving forward. <\/p>\n\n\n\n

As such, we maintain our HOLD rating on ACEN despite the consensus Target Price of P7.50 per share.<\/p>\n\n\n\n

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

ACEN reported a consolidated revenue of P9.1-Billion for the 1st quarter (Q1) of 2023, 23% higher than the previous year. However, increased borrowing costs and overhead expenses from the company\u2019s renewables expansion tempered the bottom line and resulted in a net income of P2.0-Billion for the period, a five-fold jump from last year\u2019s low base of P405.0-Million. <\/p>\n\n\n\n

To recall, the company\u2019s earnings was impacted last year by a P550-Million loss from purchasing power from WESM to fill contract obligations when SLTEC Unit 2 went offline for major maintenance. ACEN also realized a one-time loss of P450-Million to buy out a customer contract, and a P150-Million curtailment in the Visayas due to damages from Typhoon Odette.Without these one-off items, ACEN\u2019s Q1 2023 would be a 25.0% increase from this higher base of P1.6-Billion. The company\u2019s attributable EBITDA, which includes ACEN\u2019s share in the earnings of non-consolidated associates and joint ventures, rose by 76% to P4.6-Billion during the period. Its domestic operations surged by 188% to P1.9-Billion and contributed 41.3% to the total, while its international operations grew by 38% to P2.8-Billion to make up the balance.<\/p>\n\n\n\n

ACEN\u2019s total attributable output in Q1 slid by 7.5% from 1,161 GWh to 1,074 GWh primarily due to ACEN\u2019s divestment of its stake in SLTEC through the ADB\u2019s Energy Transition Mechanism. The loss of SLTEC\u2019s contribution was somewhat offset by growth in renewable output, which increased by 20% to 1,058 GWh in Q1, with Philippine operations accounting for 310 GWh (+31% YoY) and International operations delivering 748 GWh (+15% YoY). As of end of Q1, the company\u2019s renewable attributable capacity stood at 4,200-MW, which is 98% of its total power portfolio. ACEN President Eric Francia expressed confidence that the company\u2019s domestic operations will contribute more as additional RE capacity comes online during the second half of the year.<\/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>