{"id":325471,"date":"2023-10-25T21:49:23","date_gmt":"2023-10-25T13:49:23","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325471"},"modified":"2023-10-25T21:50:33","modified_gmt":"2023-10-25T13:50:33","slug":"stock-in-focus-eei-corp-eei-25-oct-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-eei-corp-eei-25-oct-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: EEI Corp. (EEI) – 25 Oct 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>EEI<\/td><\/tr>
Company Name<\/strong><\/td>EEI Corp.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>25 Oct 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 5.30<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Given the challenges posed by the slowed growth in gross capital formation
for construction as well as the impact of losses from equity in associates and
joint ventures on EEI’s earnings, we are reducing our Target Price of EEI to P5.30\/share. This adjustment reflects the cautious outlook for the construction sector and the need for EEI to address its associated losses while also acknowledging potential future opportunities such as the government’s Build Better More Infrastructure Program. Hence, we are placing a HOLD recommendation on EEI.<\/p>\n\n\n\n

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

EEI Corporation (EEI) recorded a net loss of -P701.12 million in the 2nd Quarter 2023, primarily due to losses from its equity in associates and JV, primarily ARCC. Consolidated revenues rose by +25% y\/y to P7.85 billion, but gross profit shrank by -21% y\/y to P515 million due to delays in materials, weather, and approvals. The growth in EEI\u2019s topline was mainly driven by improving construction contracts.<\/p>\n\n\n\n

The company’s unworked portion of existing contracts is at P47.4 billion, but expects a robust inflow of projects. The Build Better More Infrastructure Program is expected to boost construction services demand. The construction sector experienced growth in gross fixed capital formation in 2021 and 2022, indicating potential recovery despite economic challenges. However, the sector’s growth in 2Q23 was below average, indicating economic risks.<\/p>\n\n\n\n

The CWMPI, which has been on a downtrend since October 2022, could be a potential growth source. The Build Better More program, which will continue to
stimulate domestic construction demand, will also benefit the sector.<\/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>