MANILA Electric Co. (Meralco) shares rose last week following the groundbreaking ceremony for the P200-billion Terra Solar project.
The power distributor ranked 13th in value turnover, with P479.31 million worth of 987,650 shares traded from Nov. 18 to 22, according to data from the Philippine Stock Exchange.
Meralco shares closed at P486 on Friday, up by 0.2% from P485 on Nov. 15. Year to date, the stock had increased by 21.8%.
Germaine O. Guinto, power and utilities analyst at Maybank Securities, Inc., said that Meralco became one of the most actively traded stocks last week due to the groundbreaking of its Terra Solar project.
“Perhaps the stock has been topical this week because of the recent groundbreaking of the Terra Solar Project, boosting confidence in Meralco undertaking a large-scale solar initiative,” Ms. Guinto said in an e-mail.
“The Terra Solar groundbreaking attracted significant investor attention, emphasizing Meralco’s renewable energy initiatives. Seasonal demand growth and its defensive nature further supported high trading activity,” Arielle Anne D. Santos, equity analyst at Regina Capital Development Corp., said in a Viber message.
Last week, President Ferdinand R. Marcos, Jr. and Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan led the groundbreaking ceremony for the Meralco Terra Solar Project, alongside leaders from the power distributor, SP New Energy Corp., and Actis.
The 3,500-hectare project, covering five municipalities between Nueva Ecija and Bulacan provinces, which is the world’s largest solar and battery storage facility, will be the power generation source for Meralco.
It also has a 3,500-megawatt (MW) solar power plant capacity and a 4,500-MW battery storage capacity.
Moreover, the Meralco Terra Solar project is expected to benefit around 2.4 million households, create up to 10,000 jobs, and reduce carbon emissions by more than 4.3 million metric tons — which is equivalent to removing three million gasoline-powered cars from roads — once it is fully operational by 2027, according to Mr. Marcos.
Mr. Marcos said that it is also designed to address the surging demand for electricity and the need to shift to sustainable energy.
Ms. Guinto also said that the process of the renewal of Meralco’s franchise also affects the movement of its stock.
“Every step closer to Meralco franchise renewal is a catalyst for Meralco. Earlier this month, the House of Representatives passed a bill extending Meralco’s franchise for another 25 years,” Ms. Guinto said.
On Nov. 12, Senator Juan Miguel F. Zubiri filed Senate Bill No. 2876 to allow Meralco to continue to construct, operate, and maintain its electric distribution systems in Metro Manila, Bulacan, Cavite, Laguna, Batangas, and Rizal for another 25 years.
This came after the House of Representatives approved on final reading a bill that seeks the franchise renewal of the power distributor, which includes a provision that will allow its franchise to be effective four years ahead of its initial expiry.
For the third quarter, Meralco’s attributable net income reached P11.31 billion, a 7.3% year-on-year increase from P10.55 billion. Meanwhile, its consolidated revenue inched up by 6.8% to P117.95 billion from P110.41 billion.
From the January-to-September period, Meralco had an attributable net income of P33.76 billion, higher by 18.9% from last year’s P28.4 billion, while consolidated revenue for the period also increased by 6% to P355.42 billion from P335.23 billion.
“We forecast Meralco’s full-year net income to be upwards of P43 billion, reflecting a 14% increase year on year, with the fourth quarter contributing around P9.5 billion,” Ms. Guinto said.
“Likely to see at least mid-to-high single-digit bottom-line growth driven by holiday demand and operational efficiencies,” Ms. Santos said.
Ms. Santos also pegged the initial support at P484 per share, while resistance at P492 per share.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Charles Worren E. Laureta
