{"id":330093,"date":"2024-10-29T01:27:09","date_gmt":"2024-10-28T17:27:09","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330093"},"modified":"2024-10-29T01:27:11","modified_gmt":"2024-10-28T17:27:11","slug":"stock-in-focus-manila-water-co-mwc-29-oct-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-water-co-mwc-29-oct-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Manila Water Co. (MWC) – 29 Oct 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MWC<\/td><\/tr>
Company Name<\/strong><\/td>Manila Water Company Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>29 Oct 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 26.10<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We remain a HOLD on MWC, mainly due to our Target Price of P26.10 being below its last traded price. However, our Target Price will likely go up once we roll over our valuations to 2025 after they disclose their 3rd quarter (Q3) 2024 earnings.<\/p>\n\n\n\n

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

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

MWC completes sale of Bulacan water utilities to SMC<\/strong><\/p>\n\n\n\n

Filipinas Water Holdings Corp. (FWHC), MWC\u2019s wholly-owned subsidiary, has signed a share purchase agreement with SMC Bulacan Water Services Corp. for the sale of its 90% stake in Bulakan Water Co. and Obando Water Co. for P1.02-Billion. MWC intends to use the proceeds to fund other strategic initiatives for areas outside of its core East Zone concession. The transaction would increase MWC\u2019s cash pile by around 13% and would go a long way towards funding its P3- to 4-Billion capex requirements for NEZ-PH.<\/p>\n\n\n\n

A drop in the bucket<\/strong><\/p>\n\n\n\n

Bulakan and Obando water billed a combined 2.5-Mn cu.m. (mcm) in 1H 2024, a very small fraction of NEZ-PH\u2019s total billed volume of 60.1 mcm for the same period. The two areas\u2019 combined billed connections of 24,617 households is likewise a small percentage of NEZ-PH\u2019s total billed connections of 293,384 households. While MWC does not disclose granular data for revenues and earnings of its smaller service areas, we doubt that the loss of Bulakan and Obando would make a significant dent on MWC\u2019s finances.<\/p>\n\n\n\n

Making Bulacan SMC country<\/strong><\/p>\n\n\n\n

On the other side of the transaction, taking control of these water companies would further consolidate SMC\u2019s control over the province of Bulacan. To recall, SMC is currently building an airport and an adjacent \u201cAerocity\u201d in the municipality of Bulakan, as well as the MRT-7 line which will connect North Avenue in Quezon City to San Jose del Monte, Bulacan. SMC is also in talks to merge its tollroad units with MPI\u2019s NLEX, which traverses the province.<\/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>