{"id":326377,"date":"2024-01-16T18:16:40","date_gmt":"2024-01-16T10:16:40","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326377"},"modified":"2024-01-16T18:16:41","modified_gmt":"2024-01-16T10:16:41","slug":"stock-in-focus-manila-electric-co-meralco-mer-16-jan-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-electric-co-meralco-mer-16-jan-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Manila Electric Co. – Meralco (MER) – 16 Jan 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MER<\/td><\/tr>
Company Name<\/strong><\/td>Manila Electric Co. (Meralco)<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>16 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 432.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We set our target price (TP) for Manila Electric Company (MER) to Php432.00
based on our Discounted Cash Flow (DCF) valuation method. Based on the recent closing price, the total return potential is 14.4%, including the 2024 dividend yield forecast of 5.0%. <\/p>\n\n\n\n

We believe the firm will be able to continue to grow with expected energy sold given the onset of El Ni\u00f1o and the continued improvement of its power generation business with PacificLight leading the charge as it enjoys improved fuel margins in Singapore. We recommend a BUY.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

MGreen gets 50.5% total voting interest in SPNEC<\/h3>\n\n\n\n

MER\u2019s subsidiary, MGen Renewable Energy Inc. (MGreen), has entered into a subscription agreement with SP New Energy Corp. (SPNEC) for the subsciption of 15.7 billion common shares and 19.4 billion preferred shares of SPNEC, which amounted to Php15.9 billion. As a result, MGreen became a controlling shareholder
of SPNEC with a total voting interest of 50.5%. The acquisition of shares will
boost MER\u2019s RE portfolio as SPNEC has over 10GWs of plants under its pipeline.
This includes Terra Solar\u2019s 3,500MW solar plant and 4,000MW energy storage
system slated for completion by 2026\/2027. Note that Terra Solar\u2019s construction
began last week.<\/p>\n\n\n\n

2024 outlook<\/h3>\n\n\n\n

We expect 2024\/ 2025 core net income to advance 7.1%\/ 4.8% to Php40.6 billion\/
Php42.5 billion. We project revenues to grow 8%\/ 4% to Php479.7 billion\/ Php498.2 billion as we expect a respective 4.0% and 3.4% growth in energy sales. <\/p>\n\n\n\n

Furthermore, we project 2024\/ 2025 other income to grow by 28.7%\/ 8.8% to Php12.4 billion\/ Php13.5 billion through its push for renewable energy expansion.<\/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>