MAEOY - Manila Electric: Regulatory Headwinds Remain The Key Risk
Elevator Pitch
I maintain a "Neutral" rating on Philippines-listed electric utility Manila Electric Company (OTCPK:MAEOY) [MER:PM]. There is still significant uncertainty over the timeline for the fifth rate regulatory period and the potential changes to Manila Electric's tariff rates for its power distribution business. This remains the key downside risk for Manila Electric. Furthermore, potential delays in the construction of new power plants increase the downside risks for the earnings generated from Manila Electric's power generation business.
Although Manila Electric's forward P/E valuation is undemanding relative to historical averages, I don't find the