{"id":329660,"date":"2024-09-26T00:24:15","date_gmt":"2024-09-25T16:24:15","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329660"},"modified":"2024-09-26T00:24:16","modified_gmt":"2024-09-25T16:24:16","slug":"stock-in-focus-semirara-mining-power-corp-scc-26-sept-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-semirara-mining-power-corp-scc-26-sept-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Semirara Mining & Power Corp. (SCC) – 26 Sept 2024 by AP 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 & Power Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>26 Sept 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 32.88<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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One thing that would be positive for SCC is that coal plant retirement has not yet gained momentum in the Philippines, with only two retirements in the past ten years, so SCC\u2019s volumes could be underpinned by domestic demand. However, this may change if more powergen operators avail of the ADB\u2019s Energy Transition Mechanism Program. With such a bleak long-term outlook on its earnings, we reiterate our HOLD rating on SCC with a Target Price of P32.88 per share.<\/p>\n\n\n\n

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

China and India planning to boost coal production<\/strong><\/p>\n\n\n\n

A report by US-based non-government organization Global Energy Monitor (GEM) revealed that the two biggest coal producers (and consumers) in the world, China and India, are expanding their coal mine pipeline to satisfy local demand. According to GEM, China has 1.2-Bn tonnes of capacity in development or around 25.5% of its 2023 production of 4.7-Bn tonnes. India, on the other hand, is looking to increase its production capacity from 982-Mn tonnes to more than 1.5-Bn tonnes by 2030.<\/p>\n\n\n\n

RE could never<\/strong><\/p>\n\n\n\n

In 2022, India overtook China as the world\u2019s most populous country. Due to its massive population, renewables development is unable to keep up with surging demand and the newly-reelected Modi government has approved 93.0-GW of new coal generation capacity expected to be built by 2032 to ensure energy security. China, on the other hand, has already drastically reduced its pipeline of new coal power but still approved 9.1-GW of new capacity in the first half of 2024. Despite being the global leader in building RE capacity, Beijing remained cautious in its approach to energy transition especially after droughts earlier this year impacted hydropower production and brought widespread blackouts. To date, China still has around 1,147-GW of coal generation capacity.<\/p>\n\n\n\n

No more windfall earnings in sight for SCC<\/strong><\/p>\n\n\n\n

Coal prices are expected to decline by 6.5% from current prices to around $130.00\/MT in 2025, and to drop by another 12.3% to $114.00\/MT in 2026. This is consistent with our expectations of a 13.6% reduction in SCC\u2019s earnings next year followed by a bigger drop the following 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>