{"id":326297,"date":"2024-01-05T12:40:43","date_gmt":"2024-01-05T04:40:43","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326297"},"modified":"2024-01-05T12:40:43","modified_gmt":"2024-01-05T04:40:43","slug":"stock-in-focus-manila-water-co-mwc-5-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-water-co-mwc-5-jan-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Manila Water Co. (MWC) – 5 Jan 2024 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>5 Jan 2024<\/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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MWC under Enrique Razon Jr. has shown a remarkably prudent approach to deals that is also evident in other Razon companies. Both ICT and BLOOM had no compunctions about terminating agreements that would not serve the company\u2019s best interests, and this approach is especially important when it comes to capital intensive sectors like water distribution. The termination of both Cebu and Pangasinan contracts would ease the capex burden on MWC, which would give it more elbow room to allocate more resources to units that generate good revenues such as its Manila East Zone concession area. With this in mind, we maintain our BUY rating on MWC with a Target Price of P23.79.<\/p>\n\n\n\n

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

MWC aborts Pangasinan contract<\/h3>\n\n\n\n

In a disclosure, MWC informed the Exchange that it has terminated its 25-year concession deal with the Provincial Government of Pangasinan following the latter\u2019s non-fulfilment of certain undisclosed conditions precedent. The initial agreement inked in 2022 calls for MWC to deliver an extra 200 million liters per day (MLD) to 14 cities and municipalities in Pangasinan. The contract had an estimated capex program of P8-Billion that would have created infrastructure to source water from the Agno River using riverbank filtration technology.<\/p>\n\n\n\n

Not the first deal to get axed<\/h3>\n\n\n\n

Early last month, MWC also terminated a bulk water supply contract with Metropolitan Cebu Water District for undisclosed reasons. The agreement to provide a minimum of 35 MLD to Metro Cebu was inked in 2012 and was supposed to be effective until 2042. Notably, Cebu Water does not contribute significantly to MWC\u2019s revenues stream.<\/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>