{"id":325733,"date":"2023-11-15T22:49:45","date_gmt":"2023-11-15T14:49:45","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325733"},"modified":"2023-11-15T22:49:46","modified_gmt":"2023-11-15T14:49:46","slug":"stock-in-focus-manila-water-co-mwc-15-nov-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-water-co-mwc-15-nov-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Manila Water Co. (MWC) – 15 Nov 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MWC<\/td><\/tr>
Company Name<\/strong><\/td>Manila Water Company Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 Nov 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 23.79<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Despite the miss on the 3rd quarter (Q3) earnings, we remain bullish on MWC as higher tariffs would continue to grow the company\u2019s revenues even if billed volume is less-than-expected. As such, we maintain our BUY rating on MWC, with a very robust upside potential of 36.7% based on our fair value estimate of P23.79 per share.<\/p>\n\n\n\n

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

Net income trails our estimates<\/h3>\n\n\n\n

MWC\u2019s net income for the 3rd quarter 2023 reached P2.2-Billion, slightly behind our estimates of P2.4-Billion for the quarter. Year-to-date earnings of P7.3-Billion likewise trailed our forecast of P7.7-Billion for the period.<\/p>\n\n\n\n

Slower billed volume growth in Manila East Zone<\/h3>\n\n\n\n

Billed volume growth in Manila East Zone slowed to 1.6% in Q3, from 5.0% in Q2 and 6.1% in Q1, which management attributed to seasonality factors. Despite slower volume growth, revenues still posted robust growth of 33.9% YoY during the quarter on the back of higher tariffs. Costs were likewise well-managed and declined 3% YoY in Q3 despite higher direct and overhead costs, particularly manpower and electricity expenses.<\/p>\n\n\n\n

Lower contributions from NEZ-International<\/h3>\n\n\n\n

The company\u2019s Thailand associate, East Water, continued to weigh on the International segment\u2019s performance. Higher interest costs and lower revenues from East Water was the primary contributor to the 37.5% decline in NEZ-International\u2019s contribution to earnings. However, management gave guidance that they expect East Water\u2019s profitability to improve early next year as new distribution infrastructure in the area becomes operational.<\/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>