{"id":328943,"date":"2024-08-14T01:07:26","date_gmt":"2024-08-13T17:07:26","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328943"},"modified":"2024-08-14T01:07:28","modified_gmt":"2024-08-13T17:07:28","slug":"stock-in-focus-acen-corp-acen-14-aug-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-acen-corp-acen-14-aug-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: ACEN Corp. (ACEN) – 14 Aug 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>14 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 6.31<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

Given the positive developments in the company and the most recent earnings beat, we reiterate our BUY rating on ACEN although it comes with a warning that upside to our Target Price of P6.31 is now only 14.7%. However, we acknowledge that this Target Price may still move higher as we see more earnings growth in the latter half of the year.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

ACEN beats earnings expectations<\/h3>\n\n\n\n

ACEN reported a net income (attributable to shareholders) of P6.3-Billion for the 1st half (1H) 2024, reaching 68.0% of full-year forecast of P9.3-Billion. This is despite a slight miss on revenues, which was reported to be P19.3-Billion or only 47.4% of our 2024 estimates. The company clarified that the apparent 6.6% year-on-year (YoY) decline in revenues for the first half was due to a difference in the recognition of revenues from ACEN\u2019s remaining thermal asset, SLTEC, in the same period last year. Adjusting for this difference would result in a 10.3% increase in revenues YoY. <\/p>\n\n\n\n

Aside from this, the key to ACEN\u2019s earnings beat was the 24.6% drop in cost of services offsetting the 26.4% increase in general and administrative expenses, resulting to an 18.2% decline in total costs. Note that the reported figures include one-time gain from sale of assets of P154-Million for 1H 2023 and P1.35-Billion for 1H 2024. Core net income excluding these gains grew by 21.2% YoY.<\/p>\n\n\n\n

More power, more money<\/h3>\n\n\n\n

ACEN\u2019s attributable renewable energy (RE) output jumped by 42.1% to 2,908 GWh in the first half and by 34.3% to 1,328 GWh in the second quarter alone. This was primarily due to fresh contributions from the newly commissioned facilities: SanMar Solar, Pagudpud Wind, CagNorth, and Arayat-Mexico 2 in the Philippines, and New England Solar (Australia), Masaya Solar (India), Super Solar and Lac Hoa & Hoa Dong Wind (Vietnam). However, there was a larger-than-expected QoQ decline of 22%, even after factoring in seasonality, due to weaker wind regime in Southeast Asia.<\/p>\n\n\n\n

Australia and India making meaningful contributions<\/h3>\n\n\n\n

The much-awaited commissioning of ACEN\u2019s solar projects in Australia and India are finally making meaningful contributions, with Australia having generated 408 GWh in 1H 2024 (21.6% of total) and India contributing 384 GWh (20.3% of total). In particular, we like the synergy of ACEN having large-scale solar projects in both the North and South hemispheres as the seasonality factors would somewhat cancel out.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Check how many brokers recommend this stock<\/h2>\n\n\n\n
\n
All Stock Rankings<\/a><\/blockquote>