Daily Brief Utilities: JSW Energy Ltd, China Longyuan Power, Shikoku Electric Power Co, SPC Power Corp, Vivant Corp/Philippines and more

• JSW has shown strong growth in generation capacity, with plans to double it to 30GW by 2030. The company is also venturing into ancillaries like battery assembly and hydrogen production. 
• We conservatively estimate FY26 EBITDA at 10,000cr (11% below consensus) with 20% CAGR from capacity expansion (25% CAGR to 30GW) and improving utilisation (35% CAGR in generation).
• We ascribe EV/EBITDA multiple of 8-12x to the thermal business and 12-16x multiple to renewables business to arrive at SOTP valuation of 550-770 by March 2027 vs CMP of 480.

• Hs within the liquid AH pair universe UNDER-performed As on average by 0.78% on A-share index rebal week. Beautiful Skew behaved better. H Utilities were bought.
• Quiddity H/A Portfolio performance slightly positive (+23bp). Stay the Beautiful Skew course.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free for all SK readers.

• Shikoku Electric Power is demonstrating a significant financial turnaround, with net income rebounding strongly in the latest fiscal years after a loss in FY2023, driven by operational efficiencies and a favorable regulatory environment.
• The company is strategically expanding its renewable energy portfolio, with a target to increase capacity to 500MW by FY2030 and 2GW by FY2050, focusing on solar (including floating solar), biomass, and wind power.
• The stable operation of its sole nuclear reactor, Ikata Unit 3, is a critical earnings driver, though it remains subject to regulatory oversight, legal challenges, and periodic maintenance shutdowns.

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• SPC Power Corp. is an established power generation company in the Philippines with a portfolio of primarily diesel and coal-fired power plants. The company has demonstrated strong profitability and resilience, consistently paying dividends.
• The company is at a strategic inflection point, aiming to add 500 MW of new capacity by 2029, with a significant focus on shifting towards renewable energy, including solar and battery storage projects, to align with the national energy transition.
• While historically reliant on thermal assets, SPC faces risks associated with the expiration of service agreements and the global push away from fossil fuels. Its future success will depend on the effective execution of its renewable energy expansion and navigating the competitive and evolving Philippine power market.

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• Vivant Corp. is capitalizing on the Philippines’ growing energy demand, demonstrating robust revenue and profit growth driven by its power generation segment, particularly through strategic gains in the wholesale electricity spot market.
• The company is pursuing a balanced strategy of maintaining its conventional energy assets for grid stability while aggressively expanding its renewable energy portfolio, targeting a 30% renewable share by 2030 with a projected investment of approximately PHP 46 billion.
• While exhibiting strong top-line growth and a healthy balance sheet with a low debt-to-equity ratio, the company faces challenges with volatile free cash flow due to significant capital expenditures for expansion, alongside risks inherent in the regulated and capital-intensive Philippine power industry.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.