{"id":326506,"date":"2024-01-25T14:21:28","date_gmt":"2024-01-25T06:21:28","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326506"},"modified":"2024-01-25T14:21:30","modified_gmt":"2024-01-25T06:21:30","slug":"stock-in-focus-acen-corp-acen-25-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-acen-corp-acen-25-jan-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: ACEN Corp. (ACEN) – 25 Jan 2024 by AP 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>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>25 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 6.78<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We think that ACEN at this point has become too cheap to ignore with its 2024 P\/E ratio of 15.7x being within range of the median 14.5x P\/E for comparable companies in the region. As such, we are changing our rating for ACEN from HOLD to BUY based on a consensus Target Price of P6.78 per share.<\/p>\n\n\n\n

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

The relentless march to a renewable future<\/h3>\n\n\n\n

Data from the Department of Energy showed that the DOE has approved an additional 271 renewable energy projects last year, with a combined potential capacity of 54,422.8-MW or a whopping 67.7% increase from year-end 2022. A vast majority of the newly-approved projects are wind (110) and solar (158), with three geothermal projects in the pipeline. Installed capacity likewise increased by 208.1-MW as new projects come online, with solar facilities accounting for 137.3-MW and hydropower for 63.6-MW while the balance comes from geothermal.<\/p>\n\n\n\n

The rising sun<\/h3>\n\n\n\n

Based on available data from the International Energy Agency (IEA), wind and solar have already overtaken fossil fuels as the cheapest energy source. Onshore wind is now slightly cheaper than solar in terms of levelized cost of energy (LCOE), but areas with sufficient wind density for commercial viability are limited, particularly here in the Philippines. The size of wind turbines relative to solar panels also present
unique logistical challenges, which makes wind longer to set up. Because of this, while wind accounts for 63.6% of total potential capacity, installed wind capacity at present only accounts for 7.7% of the total. The cheap cost, ease of installment, and wider availability of solar has led to it being the best choice for RE in the domestic setting.<\/p>\n\n\n\n

The key players<\/h3>\n\n\n\n

The biggest players in the local solar space are listed ACEN and SPNEC, and soon-to be-listed Citicore Renewable Energy Corp. (CREC). However, we still maintain our
reservations regarding ACEN, mainly with respect to the company\u2019s debt load. According to a report by IEA, most of the cost decreases in renewables stemming from lower commodity prices and technological advances would be offset by higher cost of capital as interest rates remain elevated. <\/p>\n\n\n\n

This would be the main reason that we are concerned about ACEN\u2019s estimated 2024 net debt-to-EBITDA of 8.17x, which is higher than the 6.01x median net-debt-to-EBITDA of comparable companies. On the other hand, we remain a HOLD on SPNEC as a significant overhang remains, with the potential of additional share issuance in the near future to help the company fund its development pipeline and to increase its public float.<\/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>