{"id":326599,"date":"2024-02-02T00:47:02","date_gmt":"2024-02-01T16:47:02","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326599"},"modified":"2024-08-27T00:34:25","modified_gmt":"2024-08-26T16:34:25","slug":"stock-in-focus-manila-water-co-mwc-2-feb-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-water-co-mwc-2-feb-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Manila Water Co. (MWC) – 2 Feb 2024 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/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 26.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We maintain our BUY recommendation with a Target Price of P26.20\/share as the stock has a potential upside of ~45% based on the prevailing market price.<\/p>\n\n\n\n

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

Earnings rundown<\/h3>\n\n\n\n

In the 3rd quarter (3Q) 2023, MWC saw an increase in its attributable net income, which surged by +38.08% year-on-year (y\/y) to P2.24 billion, driven by a notable surge in its revenue, which grew by +33.85% y\/y to P7.75 billion. Despite the substantial growth in revenue, the east zone water concessionaire managed to maintain its total cost of services. As a result, MWC saw a spike in its gross profit in 3Q23, increasing by +63.51% y\/y to P5.12 billion. Key contributors to this increase were notable declines in costs and expenses, particularly in wastewater costs, repairs and maintenance, and contractual services expenses.<\/p>\n\n\n\n

MWC dives into expansion with two sewage treatment plants (STPs)<\/h3>\n\n\n\n

MWC said that the P2.5 billion Hinulugang Taktak sewage treatment plant (STP) in Antipolo City is slated to commence operations by Dec this year. The Hinulugang Taktak STP, currently at over 60% completion, is part of MWC\u2019s initiative to enhance sanitation services in the East Zone of Metro Manila and Rizal. The project aims to treat up to 16mn liters of wastewater daily, contributing to ecological maintenance and rehabilitation in the area. <\/p>\n\n\n\n

Anticipated to serve 148,000 residents in Antipolo City, the Hinulugang Taktak STP aligns with the company’s commitment to providing quality sewerage services. Additionally, the east zone concessionaire is nearing completion of Mandaluyong
West Sewer Network Package 1. This project in Barangay Hulo, Mandaluyong City, is 64.49% complete and will be part of the Mandaluyong West-San Juan South-Quezon City South Sewer Project. The P4.2bn sewer network includes a treatment plant with a capacity of 60MLD (expandable to 120 MLD), along with pump stations, lift stations, interceptor boxes, and channels. Upon completion by 2037, it will benefit 704,260 residents across Mandaluyong, San Juan, and Quezon City.<\/p>\n\n\n\n

These two STP projects will be the two major growth drivers for the firm this year as constructing additional STPs enables the water company to broaden its service coverage, catering to more areas or a larger population within its current service zone. <\/p>\n\n\n\n

This expansion can lead to increased revenue streams from new customers or increased usage by existing customers. Moreover, water companies typically impose charges for sewage treatment services. By adding more treatment plants, the company can generate additional revenue from these fees, especially if the plantincreases the capacity or efficiency of sewage treatment, allowing for higher service volumes.<\/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>