{"id":328631,"date":"2024-07-30T13:00:15","date_gmt":"2024-07-30T05:00:15","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328631"},"modified":"2024-08-27T00:31:59","modified_gmt":"2024-08-26T16:31:59","slug":"stock-in-focus-synergy-grid-development-phils-sgp-30-july-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-synergy-grid-development-phils-sgp-30-july-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Synergy Grid & Development Phils. (SGP) – 30 July 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SGP<\/td><\/tr>
Company Name<\/strong><\/td>Synergy Grid and Development Phils., Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>30 July 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 11.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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The regulatory environment and ongoing investments in infrastructure projects provide a conducive atmosphere for steady revenue generation. SGP\u2019s management is confident in delivering consistent returns to shareholders through its robust dividend policy and strategic investments in the energy sector. SGP\u2019s alignment with national energy policies and infrastructure development plans further strengthens its position as a reliable income-generating entity. We maintain our BUY rating, with a Target Price of P11.00\/share for SGP.<\/p>\n\n\n\n

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

For the 1st quarter (1Q) 2024, Synergy Grid & Development Phils., Inc. (SGP) reported an operation services revenues of P13.46 billion, up 0.68% year on-year (y\/y) on the back of the billing adjustment of PSALM account for the prior year\u2019s feedback power charges and higher CC\/RSTC. <\/p>\n\n\n\n

This underscores SGP\u2019s stable income stream from its core operations in the transmission business. This revenue stability is a testament to NGCP’s monopolistic position in the national power transmission sector, benefiting from regulated returns. However, Net Income for 1Q 2024 was P5.88 billion, reflecting a -13.70% y\/y decline due to higher opex mainly on insurance expenses, supervision and regulatory fees, public relation, corporate social responsibility, and fuel and oil.<\/p>\n\n\n\n

SGP\u2019s dividend policy, which aims to declare dividends up to 100% of the prior year\u2019s Net Income after Tax (NIAT), stresses its commitment to returning value to shareholders. During the period, the company declared cash dividends amounting to P0.3474 per share, totaling P1.83 billion, reflecting its strong earnings capacity
and solid cash position. SGP\u2019s major asset is its strategic investment in NGCP. <\/p>\n\n\n\n

In April 2022, SGP subscribed to 203.63 million non-voting preferred shares of NGCP at a total subscription price of P12.24 billion. This significant investment is aimed at financing NGCP’s capital expenditure requirements, which are critical for maintaining and expanding the national grid infrastructure. The capital-
intensive nature of NGCP’s operations necessitates continuous investment to ensure reliability and efficiency in power transmission, thereby supporting the country\u2019s economic growth and energy security.<\/p>\n\n\n\n

Check how many brokers recommend this stock<\/h2>\n\n\n\n
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