Elevator Pitch
I downgrade my rating on Philippines-listed power company Aboitiz Power Corporation (ABZPF) (ABZPY) [AP:PM] from "Bullish" to "Neutral".
Electricity consumption in the Philippines has declined by -30% YoY since the lockdown in Luzon, and weaker-than-expected power demand going forward is a key downside risk for Aboitiz Power. Aboitiz Power's net gearing of 140% as of end-FY2019 is high both on an absolute and relative basis, which brings credit risks for the company into the spotlight.
A key re-rating catalyst for Aboitiz Power in the medium-to-long term is the company's geographical and energy mix