The case for & against
Bull & Bear analysis
Bullish
Manila Electric Company (Meralco) (Ticker: MAEOY) is the largest electric distribution utility in the Philippines, serving over 8 million customers. The company operates at a critical juncture within the energy sector, where it seeks to balance fossil fuel generation with a transition towards cleaner energy sources. Meralco is positioned to capitalize on trends such as renewable energy and infrastructure modernization, which are essential themes in the context of global energy transition and regulatory dynamics.
Bull says
- ↑Power-gen revenue +52% YoY to ₱16.8B, contributing 33% of ₱50.6B CCNI
- ↑CCNI rose 12% YoY to ₱50.6B, driven by stable operations
- ↑Dividend declared at ₱28/sh (5% yield) supported by ₱109.3B cash reserves
- ↑Renewable capacity target of 1,800 MW AC by 2030 doubles green portfolio
- ↑Strategic LNG and nuclear readiness investments expand future growth pipeline
- ↑High earnings yield, strong profitability and momentum factors underpin bullish case
Bear says
- ↓Ongoing tariff reset application faces regulatory delays, risking pricing power
- ↓Energy sales volume fell 0.6% YoY amid cooler weather and office vacancies
- ↓Proposed ₱242B CapEx could pressure cash flow if project returns lag
- ↓Purchase power costs at 85% of expenses expose margins to fuel price spikes
- ↓Negative profitability and earnings yield factors plus elevated short interest signal caution
- ↓Rising solar adoption and regulatory headwinds may disrupt traditional revenue
Earnings Call · Q1 2026 · Mgmt. Guidance
Updated 05-09-2026neutral
Transcript signals
Bull points
- 2025 has been a banner year for Meralko, marked by strong operational performance despite a challenging business environment.
- Throughout the year, we remained focused on our core mandate as a distribution utility, delivering reliable, efficient, and affordable electricity to millions of Filipinos.
- Our operational indicators reached record best levels, system losses stayed below regulatory limits, service reliability improved significantly, and customer connections became faster and more efficient.
Bear points
- The slight decline of 0.6% versus an all-time high performance in 2024 was attributable to the cooler temperature with the transition from El Niño to La Niña, as well as the increased vacancies from Pogo exit and higher unrealized sales from more frequent typhoons, which led to work and class suspensions.
- our average electricity retail rate for the year was 11.81 pesos per kilowatt hour, 12.1% higher versus the same reporting period in 2024, primarily due to higher generation charges, 14.5% increase, mainly from higher Malampaya natural gas prices.
- The slight decline of 0.6% versus an all-time high performance in 2024 was attributable to the cooler temperature with the transition from El Niño to La Niña, as well as the increased vacancies from Pogo exit and higher unrealized sales from more frequent typhoons, which led to work and class suspensions.
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