Author Topic: STOCK MARKET PICK REVIEW: SCC Semirara Mining Corp Updates  (Read 41 times)

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STOCK MARKET PICK REVIEW: SCC Semirara Mining Corp Updates
« on: December 15, 2017, 10:53:35 AM »
Semirara Mining Corp. is a vertically-integrated power generation company, engaged inmboth coal mining and power generation. The company owns the right to mine the coal resources of Semirara Island in Caluya, Antique, until July 14, 2027, through its Coal Operating Contract with the Department of Energy (DOE). In 2016, the company produced 12Mil MT of coal, representing more than 90% of the country’s total coal production. In December 2009, Semirara evolved into a vertically-integrated power generation company following its acquisition of the Calaca coal-fired plant. It currently has a total power generation capacity of 850MW.

Main beneficiary of rise in power demand Semirara will be the main beneficiary of a rebound in the country’s power demand as the company plans to boost its power generation capacity from 550MW in 2013 to 1,200MW in 2019. Earnings from its coal mining business is also expected to increase given the recovery in global coal prices, and the production increase of its coal mining business given the start of operation of 2 new coal mines. Given the expansion in both the coal mining and the power generation business, we expect Semirara’s earnings to soar by a 3-year CAGR of 11% from 2016 to 2019. Furthermore, earnings from SCC’s power generation segment remains resilient as the company has already contracted more than 80% of its installed capacity.


Vertical integration a key advantage over competitors

The Calaca plant sources coal from Semirara’s existing mining operations, allowing it to save on fuel cost compared to its peers. Furthermore, SCC will enjoy even higher cost savings from Calaca unit 3 and 4 due to their abilities to utilize waste coal in generating power. We believe that this will enable SCC to secure a higher level of power supply contract from potential customers compared to its peers.

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STOCK MARKET PICK REVIEW: SCC Semirara Mining Corp Updates
« on: December 15, 2017, 10:53:35 AM »

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