{"id":329090,"date":"2024-08-20T23:08:01","date_gmt":"2024-08-20T15:08:01","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329090"},"modified":"2024-08-27T00:29:43","modified_gmt":"2024-08-26T16:29:43","slug":"stock-in-focus-citicore-energy-reit-corp-creit-21-aug-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-citicore-energy-reit-corp-creit-21-aug-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Citicore Energy REIT Corp. (CREIT) – 21 Aug 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>CREIT<\/td><\/tr>
Company Name<\/strong><\/td>Citicore Energy REIT Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>21 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 3.12<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Given the project delays, we adjust our Target Price (TP) for CREC down to P3.12 per share. Taking into consideration the stock\u2019s run-up and the reduced TP, the potential upside to our target price has now been reduced to 4% which would warrant a downgrade from BUY to HOLD. However, it must be emphasized that we remain bullish on CREC\u2019s long-term prospects and our 2025 TP will likely be revised higher as the delayed projects start contributing to the bottom line next year.<\/p>\n\n\n\n

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

Revenues miss on project delays<\/strong><\/p>\n\n\n\n

Newly-listed RE developer CREC reported revenues of P2.1-Billion, amounting to only 39.3% of our 2024 estimate of P5.3-Billion. We attribute this mainly to the delay in commercial operations of the 196-MW Batangas 1 project, which was slated to come online by the first half. To the company\u2019s credit, the project is near-completion and the delay to bringing the project online was due to right-of-way issues encountered by NGCP. The same would apply to the 175-MW Batangas 2 project, which is slated for commercial operations by the second half. CREC now expect these projects to be commissioned by the first half of next year.<\/p>\n\n\n\n

Earnings beat on lower depreciation<\/strong><\/p>\n\n\n\n

We forecasted a net loss of P319.8-Million for CREC this year, as pre-operating costs and depreciation of new facilities were expected to weigh on the bottom line. In a sense, the delays in Batangas were a blessing in disguise, as it allowed CREC to book a net income (attributable to shareholders) of P269.9-Million for the first half. <\/p>\n\n\n\n

The drop in net income using this measure was due to CREC\u2019s sale of a 28.8% stake in CREIT to SM earlier this year. Its 1st half (1H) 2024 net income, including non-controlling interest, would have amounted to P456.4-Million while 2Q 2024
net income would have amounted to P243.4-Millio. Reported EBITDA of P765-Mn was in-line with the P1.5-Billion EBITDA we forecasted for the 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>