{"id":327219,"date":"2024-03-22T00:49:38","date_gmt":"2024-03-21T16:49:38","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327219"},"modified":"2024-03-22T00:49:40","modified_gmt":"2024-03-21T16:49:40","slug":"stock-in-focus-semirara-mining-and-power-corporation-scc-22-march-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-semirara-mining-and-power-corporation-scc-22-march-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Semirara Mining and Power Corporation (SCC) – 22 March 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SCC<\/td><\/tr>
Company Name<\/strong><\/td>Semirara Mining and Power Corporation<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>22 March 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 36.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We raise our target price (TP) to Php36.00 for SCC since we expect spot prices to improve in 2025 due to the possible delays in completion of projects in the grid and the possible \u201cnew normal\u201d in prices. However, since SCC\u2019s share price has climbed by 4.3% since reporting its 2023 net income last February 28, we recommend a HOLD. Nevertheless, management should be able to declare dividends this year since 2023 earnings were still the 2nd highest in its history. Hence, we believe SCC is still a dividend play (2024 dividend yield is at 10.3%).<\/p>\n\n\n\n

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

Earnings miss<\/h3>\n\n\n\n

Semirara Mining and Power Corp. (SCC) recorded a 2023 net income of Php27.9 billion, 30% down year-on-year (y\/y). This fell below our estimates. Coal sales volume advanced by 7% to 15.8mn MTs from the 14% jump in exports, while the average selling price (ASP) for coal dropped by 26% to Php3,796. For the power segment, electricity sales grew 26% to 4,515 GWh. However, electricity ASP slimmed by 5% to Php5.40 due to improved supply in the grid, which was the main bane for missing our estimates.<\/p>\n\n\n\n

Normalizing coal prices offset by all-time high shipments<\/h3>\n\n\n\n

Despite the 2023 coal segment net income dropping by 44% to Php18.0 billion mostly on lower coal ASP prices, we highlight that SCC had a record 4Q 2023 with core net income at Php4.0 billion, 33% higher y\/y. This can be mainly attributed to the 77% jump in sales volume of 5.3mn MTs, which is an all-time high for SCC. We note that the company\u2019s exports in 4Q23 more than tripled to 3.5mn MTs with China accounting for 74% of the exports followed by South Korea with 18%.<\/p>\n\n\n\n

SCPC lifts power segment<\/h3>\n\n\n\n

Overall power segment\u2019s contribution in net income surged. SCPC was able to positively contribute a 53% jump in net income at Php7.9 billion, primarily boosted by the return of the operations of its Unit 2, which was on outage for the most in 2022. This outpaced the 12% decline in SLPGC\u2019s net income contribution at Php2.0 billion.<\/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>