{"id":325208,"date":"2023-10-05T01:23:41","date_gmt":"2023-10-04T17:23:41","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325208"},"modified":"2023-10-05T01:23:43","modified_gmt":"2023-10-04T17:23:43","slug":"stock-in-focus-acen-corp-acen-5-oct-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-acen-corp-acen-5-oct-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: ACEN Corp. (ACEN) – 5 Oct 2023 by RCBC 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>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Oct 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 7.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We set our target price (TP) for ACEN Corp. (ACEN) at Php7.20 based on a Discounted Cash Flows (DCF) methodology with 19.3%.10-year EBITDA CAGR forecast. Counting on ACEN\u2019s 2030 target capacity of 20GWs and its pipeline, its earnings may continue to grow. Our Target Price offers a potential total return of 44.5%, which includes our dividend yield forecast of 0.8%. We recommend a BUY.<\/p>\n\n\n\n

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

Earnings trajectory<\/h3>\n\n\n\n

We forecast ACEN\u2019s 2023\/2024 net income at Php9.2 billion\/Php12.8 billion. Revenues for 2023\/2024 are seen to grow by 20.5%\/11.8% year-on-year (y\/y) due to the expected start of commercial operations of the 284MW San Marcelino Solar farm in Zambales and the 420MW Masaya Solar farm in India this year. Furthermore, we expect EBITDA to grow by 74% in FY23F and 28% in FY24F, with EBITDA margins climbing to 39% and 45%, respectively, from 27% in FY22.<\/p>\n\n\n\n

Banking on Australia<\/h3>\n\n\n\n

Racing to its 2030 goal of 20GWs in renewable capacity, ACEN has been banking on Australia, as it has a 24% share (2nd highest) in ACEN\u2019s current total output capacity of 4.4GWs. This will be one of ACEN\u2019s pillars moving forward as there are a lot of projects under the company\u2019s pipeline in Australia apart from the 521MW New England Solar Phase 1. <\/p>\n\n\n\n

One is the 520MW Stubbo Solar farm in New South Wales, which is slated for completion by 2025. Second is the 1000MW Robbins Island and Jim’s Plain Wind, which is seeking development approval from Australia\u2019s Circular Head Council. Another is its partnership with Yindjibarndi Aboriginal Corp. to develop renewable energy projects of up to 3GWs in capacity.<\/p>\n\n\n\n

Core net income nearly doubles<\/h3>\n\n\n\n

ACEN recorded a 1H 2023 core net income of Php4.2 billion, 94% higher y\/y. Total revenues climbed by 28% to Php20.3 billion, mostly driven by the boost in net generation due to stronger wind regime and the start of operations of the 160MW Pagudpud Wind farm and 521MW New England Solar Phase 1. <\/p>\n\n\n\n

Total costs and expenses climbed 26% y\/y to Php19.3 billion in 1H 2023 but note that this was slower than the 32% y\/y increase recorded in 1H 2022 as ACEN used to be in a net buying position. As a result, EBITDA grew 22% to Php6.4 billion due to its switch to a net selling merchant position, the increase in retail tariffs, and the start of operations for some of its plants.<\/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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