{"id":333346,"date":"2025-07-31T01:56:35","date_gmt":"2025-07-30T17:56:35","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=333346"},"modified":"2025-07-31T01:56:40","modified_gmt":"2025-07-30T17:56:40","slug":"stock-in-focus-manila-electric-co-meralco-mer-31-july-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-electric-co-meralco-mer-31-july-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: Manila Electric Co. – Meralco (MER) – 31 July 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MER<\/td><\/tr>
Company Name<\/strong><\/td>Manila Electric Co. (Meralco)<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>31 July 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 603.40<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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As it stands, the company is also on-track to meet its self-imposed target of P50-Billion earnings by year-end. Given the financial health of MER and its ability to deliver results, we maintain our BUY rating on the stock with a Target Price of P603.40 which values the stock at a reasonable 13.6x FY25E P\/E.<\/p>\n\n\n\n

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

MER quarterly earnings beat on fresh powergen contributions<\/strong><\/p>\n\n\n\n

MER\u2019s 2Q 2025 net income of P13.2-Billion exceeded our expectations of P11.9-Billion, which brings 1H 2025 net income of P23.6-Billion in- line with our P23.0-Billion forecast for the period. The flattish performance of the core distribution utility (DU) business was offset by fresh contributions from the newly-acquired natgas power plants in Batangas and less outages from MGen\u2019s thermal business. Powergen now accounts for 37% of MER\u2019s core consolidated net income (CCNI), from 27% in the same period last year. Otherunregulated business accounted for 9% while the balance consisted of core DU.<\/p>\n\n\n\n

Powergen earnings were gassed up<\/strong><\/p>\n\n\n\n

Diving deeper into the powergen segment, energy delivered was flattish for most units except for SBPL, MGen\u2019s thermal plant in Quezon, which had a maintenance outage in the same period last year. However, earnings were boosted by the thermal plants\u2019 participation in the ancillary services market so we saw a disproportionate jump in their bottom lines. Most importantly, the newly acquired natgas power complex in Batangas under LNGPH delivered fresh earnings of P6.7-Bn, or P2.7-Bn when adjusted for MER\u2019s ownership.<\/p>\n\n\n\n

DU performance flat but actually slightly better than expected<\/strong><\/p>\n\n\n\n

The distribution side of the business delivered 27,091 GWh of energy to homes and businesses, which is just a slight bump of 0.5% from last year. However, it was actually not so bad considering that last year was a leap year with one extra day and demand was also boosted by scorching hot weather due to the El Ni\u00f1o phenomenon. In terms of earnings, the DU delivered growth of 6.7% to P13.7-Billion, which was again better than expected.<\/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>