$MER: Will It Be a ‘MERry’ Year-end for Meralco?

Price Review

Here's the review of how MER performed for the last five trading days. (Click images to enlarge.)

  • Tuesday (22 Nov 2016)

It was a High Risk Buy in the QuantDS PSE data last Tuesday for MER. The stock opened at 282.20 near our Profit Taking price (282.68) and fell down to 273.00 before closing at 273.20, breaching the Bottom Support price at 273.40.

Meralco

MER (22Nov2016)

 

  • Wednesday (23 Nov 2016)

MER broke below the Trigger Price (278.04) on the previous day and we recommended a Trigger Sell. The stock continued moving downward and breaching the Bottom Support price at 273.00.

Meralco

MER (23Nov2016)

 

  • Thursday (24 Nov 2016)

QuantDS PSE recommended a Trigger Sell for MER last Thursday but the Certainty is low at only 33%.  The price moved up to 273.40 but retreated and closed at the same previous day price. Notice that MER managed to stay above the Bottom Support price at 267.60.

Meralco

MER (24Nov2016)

 

  • Friday (25 Nov 2016)

The price of MER was unchanged and the QuantDS PSE Trigger Sell recommendation remain unchanged as well. On the last day of the week, MER's price breached the Bottom Support price at 267.60, closing at 266.00. What a bearish week for MER even though the PSEi managed to close at positive territory before the trading session ended.

Meralco

MER (25Nov2016)

  • Monday (28 Nov 2016)

We entered into another week of trading session but the price movement of MER didn't change. MER opened 2 points above the previous price, reached up to 270.00 before moving down and closing at 265.00 which is below the Bottom Support price at 265.40.

Meralco

MER (28Nov2016)

Updates

Manila Electric Company (MER) confirmed the news article released on philstar.com last Oct. 27, 2016, about the company's plan to put up a new affiliate retail electricity supplier (RES) under retail competition and open access (RCOA) rules. The company (MER) also clarified that the Supreme Court (SC) only issued a TRO for the implementation of RCOA and did not junk the case. MER also said that their decision to apply for RES is without prejudice to the final resolution of the main case.

9-Month Financial and Operating Results (Jan-Sep 2016)

See the table below showing the Financial and Operating results of MER for nine (9) months from January to September 2016 with comparatives for the same period last year.

ITEM 9-MO. 2016 (Php) 9-MO. 2015 (Php) % DIFFERENCE
Consolidated Core Net Income 15.0-B 15.8-B -5%
Consolidated Reported Net Income 15.7-B -3%
Consolidated Electricity Revenues 189.1-B 191.5-B -1%
Consolidated Distribution Revenues 42.9-B +3%
Consolidated Non-Electricity Revenues 6.0-B +9%
Consolidated Core EBITDA 26.2-B
Core Earnings Per Share 13.28
Consolidated Volume of Energy Sold 30,103 GWh +9%
Customer Count +4%
Average Consolidated Distribution Rate 1.42/kWh -7%
Average Overall Electricity Rate 7.56/kWh -11%
System Loss Rate 6.40% (All-time Low)
Financing Expenses 1.0-B +9%

Source: MER Press Release - 24 October 2016
(Some exact information are not provided.)

Analysis

MER hit the August 2015 low at 265.00, following the three (3) bearish candlestick patterns: Bearish Engulfing, Three Outside Down, and Three Black Crows. A bounce can be expected but it may be short-lived as Moving Averages and Technical Indicators are showing signs of bearishness on the daily, weekly, and monthly time frames.

Trigger Sell is still the recommendation for MER from QuantDS PSE data. A break below the major/bottom support is possible and will lead to testing the next support levels at 262.00 and 259.40. On the other side, a true breakout above 271.00 will give a confirmation for a bullish reversal.

For resistance/support levels, refer to the table on the photo below.

Meralco

MER Technical and Quantitative Analysis

What do you think about MER? Please feel free to share your thoughts in the comment section below.


 

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