MAEOY - Manila Electric: Regulatory Risks Cannot Be Ignored
Elevator Pitch
I maintain my Neutral rating on Philippines-listed electric utility Manila Electric Company (OTCPK:MAEOY) [MER:PM].
Manila Electric's 1H 2020 results were not as bad as expected with core net income down -14% YoY, but an extension of lock-down measures, considering the high daily confirmed cases of Covid-19 in the Philippines, could pose downside risks to the company's earnings. Separately, the fifth rate regulatory period and its impact on Manila Electric's distribution tariffs represent key regulatory risks for Manila Electric in the medium term, which cannot be ignored.
With Manila Electric's forward P/E