{"id":324021,"date":"2023-07-13T00:39:54","date_gmt":"2023-07-12T16:39:54","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324021"},"modified":"2023-07-13T00:39:55","modified_gmt":"2023-07-12T16:39:55","slug":"stock-in-focus-semirara-mining-power-corp-scc-13-july-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-semirara-mining-power-corp-scc-13-july-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Semirara Mining & Power Corp. (SCC) – 13 July 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SCC<\/td><\/tr>
Company Name<\/strong><\/td>Semirara Mining & Power Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>13 July 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 36.40<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

SLPGC\u2019s Unit 1 extended outage for most of the 3rd quarter (Q3) will significantly weaken SCC\u2019s year-end performance. To recall, we were betting on the company\u2019s power generation segment to underpin its revenues as selling prices for coal drop from its record highs last year. However, this buffer becomes smaller and smaller for every day that a power plant is offline. To give an idea of the impact, powergen accounted for 37.0% of revenues and 41.5% of SCC\u2019s net income in Q1. SLPGC accounts for 27.4% of that share in revenues and 16.9% of the segment\u2019s net income. <\/p>\n\n\n\n

Half of that revenue stream missing for at least 75 days roughly translates to around P801-Million of foregone revenues. Not to mention the cost of procuring power from WESM to fulfill its bilateral power supply contracts, and the cost of repairs. We estimate the loss of revenues alone to reduce SCC\u2019s year-end net income by at least 1.0%, with the potentially as high as 2.5% reduction in estimates if we consider the additional costs. <\/p>\n\n\n\n

Given this, and the uncertainty if the power unit will indeed be repaired by end-August, we maintain our HOLD rating on SCC despite the 30% upside to the consensus Target Price of P36.40.<\/p>\n\n\n\n

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

SLPGC Unit 1 will be offline until end-August<\/strong><\/p>\n\n\n\n

Semirara Mining & Power Corp. (SCC) is extending the unplanned outage of its coal-fired 150-MW Southwest Luzon Power (SLPGC) Unit 1. The power plant initially went offline at noon on June 17 due to turbine tripping caused by \u201chigh axial displacement\u201d or excessive movement of the turbine along its spinning axis. According to the company, plant management is still investigating the cause and that the turbines will undergo a detailed inspection. Repair work and return to service are targeted before the end of August.<\/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>