Citicore IPO at P2.70/share, offering 30% discount from maximum target

MANILA, Philippines — Tycoon Edgar Saavedra’s Citicore Renewable Energy Corp. (CREC), the second company to go public this year, has priced its initial public offering (IPO) at P2.70 per share, an amount that analysts say may attract more investors to a sector with significant growth potential despite risks.

The price marks a 30.4-percent discount from the maximum target of P3.88 per share for up to 2.03 billion offer shares.

It brings the IPO size to about P5.5 billion, and values the entire company at about P24.1 billion, according to Alfred Benjamin Garcia, research head at AP Securities Inc.

He added that the discounted price “gives more upside to the stock price, and should make the offer more attractive to investors.”

READ: Deal with Sys to make Citicore IPO attractive, say analysts

“I think that RE (renewable energy) is really the future of power generation, and this is where we’ll see significant growth,” he said in a Viber message.

RE firms still in their ‘nascent stage’

But Garcia also warned that there may still be some risks for investors, seeing that a lot of RE companies “are still in their nascent stage.”

READ: Citicore trims IPO size after Sy-led firm’s entry

“So a lot of their valuation comes from future growth prospects rather than their current profitability. This makes it risky for investors; so the market is a bit averse to the sector, especially with the current risk-off climate,” he added.

The offer period runs from May 27 to May 31. The shares will be listed on June 7 under the stock symbol “CREC.”

Proceeds will fund a pipeline of 1,583 megawatts of solar power projects across eight locations in the country.

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said, “Government policies are supportive of the sector, and there is a growing market preference for clean and sustainable energy.”

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