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Capital infusion and market sentiment lift AC Energy stock

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AYALA-LED AC Energy Philippines, Inc. ended the year on a high note amid the sustained positive investor sentiments and following the company’s infusion of capital in its subsidiary to acquire potential project sites.

Data from the Philippine Stock Exchange (PSE) showed 123.14 million AC Energy shares worth P1.02 billion exchanged hands from Dec. 28 to 29, making it the second most actively traded stock in the last trading week of 2020.

Shares in the Ayala energy unit closed higher by 22.1% to P9.00 apiece from its P7.37 finish on Dec. 23, 2020. Compared with the first trading day last year, its latest share price has gone up almost four times.

Local financial markets were closed on Dec. 30 until Jan. 1 in observance of mandated holidays.

“The stock has consistently been hitting a new all-time high almost every week since September 2020. It has ended as one of the best performers of the year,” AAA Southeast Equities, Inc. Head of Research Christopher John Mangun said in an e-mail.

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In a separate e-mail, Mercantile Securities Corp. Analyst Jeff Radley C. See noted the positive sentiment surrounding the stock.

“AC Energy is a monster stock this year despite the pandemic hitting our country. The company made a lot of efforts just to grow and create value for the firm,” Mr. See said.

Mr. See also noted AC Energy’s recent transaction with wholly-owned subsidiary Buendia Christiana Holdings Corp. (BCHC), which has helped fuel the stock’s rise.

AC Energy announced on Dec. 23 that it had signed an agreement to subscribe to 3.5 million preferred shares with a par value of P100. These shares are scheduled to be issued out of the increase in the unit’s authorized capital stock. These shares will then be paid in tranches with a partial payment of P150 million on the acquisition day.

On the terms of payment, AC Energy said the balance of the subscription price is payable upon demand, with the approval of BCHC’s board of directors.

It added that the transaction is subject to the necessary regulatory approvals from the Securities and Exchange Commission on the increase in the authorized capital stock of BCHC and the full payment of the subscription price.

The Ayala Corp. subsidiary has said in a disclosure that the subscription will be used by BCHC to “fund the acquisition of potential project sites.”

BCHC is a special purpose vehicle that will own the land for its parent company’s development projects.

A week prior to the transaction, AC Energy approved around P11 billion in funding for a Pampanga-based solar energy projection and a wind farm to be constructed in Ilocos Norte.

AC Energy posted an attributable net income of P977.78 million, or around three times higher than the P322.3 million recorded a year ago. For the three quarters to September, attributable net income amounted to P2.94 billion — a reversal of its loss of P229.57 million in the comparable period in 2019. 

AAA Southeast Equities’ Mr. Mangun noted AC Energy’s strong uptrend “may continue… all throughout [this] year.”

“There is some support at P8.00 and then another support level at P7.30. It may continue higher and break above P10.00 in the first trading week of January based on its momentum,” Mr. Mangun said.

Meanwhile, Mercantile Securities’ Mr. See said investors should watch how well AC Energy would execute its projects and joint ventures this year.

“The stock may reach P10.00 for now as it has already run its course. Support level will be at P8.50 and P8.00,” he said. — Michelle Anne P. Soliman

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