{"id":326584,"date":"2024-02-02T00:02:14","date_gmt":"2024-02-01T16:02:14","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326584"},"modified":"2024-02-02T00:02:15","modified_gmt":"2024-02-01T16:02:15","slug":"stock-in-focus-first-gen-corp-fgen-2-feb-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-first-gen-corp-fgen-2-feb-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: First Gen Corp. (FGEN) – 2 Feb 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>FGEN<\/td><\/tr>
Company Name<\/strong><\/td>First Gen Corp.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>2 Feb 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 27.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We set our target price (TP) for First Gen Corp. (FGEN) at Php27.50 based on a
Discounted Cash Flow (DCF) methodology driven by a 5.5% 10-year EBITDA CAGR forecast. This TP provides a hefty share price upside of 51% and a potential 2024 dividend yield of 5.5%. FGEN is the cheapest power gen stock in our coverage currently trading at 3.5x, coming from a rocky 2022 because of the drying gas supply of Malampaya. However, with the entry of its LNG terminal plant in Batangas, FGEN should be able to lessen its reliance on Malampaya.<\/p>\n\n\n\n

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

Outlook<\/h3>\n\n\n\n

We expect FGEN\u2019s 2024\/2025 core net income to grow by 6%\/7% year-on-year (y\/y) primarily from sustained plant availability and lesser replacement power purchase costs due to its new LNG terminal plant in Batangas. We see revenues growing by 4%\/8% with a possibility of an uptick in electricity prices due to the anticipated onset of El Ni\u00f1o. Costs are expected to grow by 5%\/10% along with the improved plant availability. Nevertheless, we estimate EBITDA to grow by 3%\/7%.<\/p>\n\n\n\n

Winning bid for 165MW Casecnan Hydroelectric Power Plant<\/h3>\n\n\n\n

FGEN\u2019s wholly-owned subsidiary Fresh River Lakes Corp. won the bid for the 165-MW Casecnan Hydroelectric Power Plant in Nueva Ecija at US$526 million. Furthermore, FGEN was able to sign bank loan term agreements amounting to Php20 billion to fund its growth projects, including the Casecnan plant. It expects the closing and turnover of the plant early this year.<\/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>