Dek
Originally published: August 3, 2026 · Last updated: August 3, 2026
Links to related posts
- MER Stock Study, Post 1: MER Series Introduction
- MER Stock Study, Post 2: MER Fundamental Analysis
- MER Stock Study, Post 3: MER Technical Analysis
- MER Stock Study, Post 4: MER Valuation
- MER Stock Study, Post 5: MER Risk Management
- MER Stock Study, Post 6: MER Capital Allocation
Ang Punto ng Usapan
Ang original MER valuation natin ay nagtapos sa isang practical fair-value reference na:
₱600 per share
Mula roon, itinakda natin ang:
Ordinary Buy-Below Reference: ₱510
20% Margin-of-Safety Reference: ₱480
Pero pagkatapos ng original study, nagkaroon tayo ng bagong information.
Inilabas ng MER ang Financial and Operating Results for the Six Months Ended June 30, 2026. Nagdeklara rin ang Board ng interim cash dividend na ₱11.758 per share, payable on September 23, 2026 to shareholders of record as of August 28, 2026. Ang dividend ay katumbas ng 50% ng first-half core EPS.
Kasabay nito, dumaan ang presyo sa isang malaking event-driven decline.
Sa August 3, 2026 daily chart:
Open: ₱474.00
High: ₱490.00
Low: ₱451.20
Close: ₱487.00
Ang MER position natin pagkatapos ng dalawang August 3 purchases ay:
Position: 60 shares
Average Price Net: ₱488.7095
Capital Deployed: ₱29,322.57
Capital Allocation: ₱100,000
Deployment: 29.32%
Remaining Allocation Capacity: ₱70,677.43
Kaya may tatlong tanong tayong kailangang sagutin:
Valid pa ba ang fair value near ₱600?
Saang price range maaaring gamitin ang buong ₱100,000 allocation?
Gaano kalaking position ang makatuwirang mabuo bago ang August 28 dividend record date?
Ang Dating Paniniwala
Sa original MER valuation, gumamit tayo ng normalized earnings approach supported by dividend-yield analysis.
Conceptually, mas complete sana ang full Sum-of-the-Parts valuation dahil iba-iba ang economics ng:
- regulated Distribution Utility;
- Power Generation;
- LNG;
- renewable-energy projects;
- Retail Electricity Supply;
- at other businesses.
Pero hindi sapat ang public data para sa project-by-project valuation na hindi umaasa sa maraming speculative assumptions.
Kaya pinili natin ang practical approach:
Normalized core earnings multiplied by a risk-adjusted valuation multiple, supported by a dividend-yield cross-check.
Ang old fair value na ₱600 ay galing sa normalized earnings near ₱47 per share and a central valuation multiple near 13 times.
Ngayon, may actual six-month core EPS na tayo.
Hindi na natin kailangang umasa lamang sa Q1 results o sa broad historical trend.
Ang Binagong Pananaw
Hindi ipinakita ng first-half results na bumagsak ang earnings capacity ng MER.
For the first six months of 2026:
- consolidated core net income reached ₱26.505 billion, up 3.8%;
- reported net income reached ₱26.296 billion, up 11.3%;
- core EPS reached ₱23.516;
- reported EPS reached ₱23.330;
- at core EBITDA reached ₱44.8 billion, up 4%.
The Distribution Utility remained the largest earnings contributor, but Power Generation already accounted for a substantial portion of group earnings. MGEN’s core net income rose 11% to ₱10.5 billion, supported by higher energy output, LNG investments, and renewable-energy projects.
This supports the idea that MER is no longer just a mature regulated utility.
Pero hindi rin dapat balewalain ang risk.
During the first half:
- consolidated CAPEX reached ₱39.0 billion;
- interest-bearing debt stood at ₱247.3 billion;
- net debt-to-EBITDA was 1.4 times;
- billed DU energy receivables reached ₱45.0 billion;
- at ang proposed ₱272-billion regulatory CAPEX program ay patuloy pang nire-review ng ERC.
Kaya ang updated reading ay hindi:
Tumaas ang earnings, kaya itaas agad ang fair value.
Mas tama ang:
The earnings base remains resilient, but the valuation multiple must continue carrying a regulatory and capital-expenditure discount.
Paano Ito Umaandar
Updating the Earnings Base
Ang H1 core EPS ay:
₱23.516
Kung simple annualization lamang ang gagawin, magiging:
₱47.032 full-year core EPS
Pero hindi forecast ang simpleng pagdoble.
Maaaring magbago ang second-half performance dahil sa:
- seasonality;
- demand;
- generation output;
- financing costs;
- regulatory adjustments;
- at project timing.
Kaya gagamit tayo ng tatlong normalized EPS scenarios.
Conservative Case
₱46.00 EPS
Ito ang scenario kung mahina ang second-half DU volume at mas mabigat ang financing or operating pressure.
Base Case
₱47.50 EPS
Ito ang central estimate natin. Malapit ito sa annualized first-half result, with modest support from Power Generation and RES.
Strong Case
₱49.00 EPS
Ito ang scenario kung magpatuloy ang growth contribution ng generation, LNG, and renewable projects without assuming an aggressive acceleration.
Updating the Valuation Multiple
Sa original study, gumamit tayo ng broad 11-times to 15-times earnings range.
For the update, mas bagay ang:
Conservative Multiple
11 times
This reflects elevated regulatory uncertainty, substantial CAPEX, and heavier debt.
Base Multiple
12.5 times
This recognizes MER’s earnings quality, dividend history, regulated franchise, and growing energy platform—pero may explicit risk discount.
Strong Multiple
14 times
Ito ang scenario kung maganda ang project execution at maging mas constructive ang regulatory environment.
Updated Earnings Sensitivity
Using ₱46 EPS
At 11 times:
₱506
At 12.5 times:
₱575
At 14 times:
₱644
Using ₱47.50 EPS
At 11 times:
₱522.50
At 12.5 times:
₱593.75
At 14 times:
₱665
Using ₱49 EPS
At 11 times:
₱539
At 12.5 times:
₱612.50
At 14 times:
₱686
The broad earnings-based range is:
₱506 to ₱686 per share
The central valuation cluster is:
₱575 to ₱613 per share
The base calculation is:
₱47.50 × 12.5 = ₱593.75
For practical MH use, we round this to:
Updated Indicative Fair Value: ₱595 per share
So the old ₱600 anchor did not materially change.
The estimate moved slightly lower because the stronger earnings evidence was balanced by a lower risk-adjusted multiple.
Dividend-Based Cross-Check
MER declared an interim dividend of:
₱11.758 per share
The record date is August 28, 2026, while payment is scheduled for September 23, 2026. The dividend represents 50% of first-half core EPS.
If full-year normalized core EPS reaches ₱46 to ₱49 and the regular 50% payout relationship continues, the indicative full-year regular dividend range would be:
Conservative: ₱23.00 per share
Base: ₱23.75 per share
Strong: ₱24.50 per share
Using the ₱23.75 base dividend:
At a 4% required yield:
₱593.75 implied value
At a 4.5% required yield:
₱527.78
At a 5% required yield:
₱475.00
The dividend cross-check therefore supports the central earnings valuation near ₱595 when the required yield is around 4%.
But it also shows why the market can move toward the high-₱400s when investors demand a yield closer to 5%.
Updated Margin-of-Safety Map
Using the updated ₱595 fair value:
10% Margin of Safety
₱535.50
15% Margin of Safety
₱505.75
20% Margin of Safety
₱476.00
25% Margin of Safety
₱446.25
For practical execution, we round these to:
Ordinary Buy-Below Reference: approximately ₱505
20% MOS Reference: approximately ₱476
25% MOS Reference: approximately ₱446
The updated deep-value accumulation zone is:
Approximately ₱445–₱476
For actual portfolio use, the simpler rounded range remains:
₱450–₱480
Hindi kailangang maging sobrang precise sa sentimo ang operating map.
Ang mahalaga ay malinaw na ang mid-₱400s represented a 20%–25% discount from updated fair value.
August 3 Purchases Under the Updated Valuation
On August 3, we purchased:
20 shares at ₱454.00
20 shares at ₱462.50
The ₱454 purchase was approximately:
23.70% below the ₱595 fair value
The ₱462.50 purchase was approximately:
22.27% below fair value
Both transactions were therefore inside the formal 20%–25% margin-of-safety zone.
The combined 40-share purchase had a gross weighted average execution price of:
₱458.25
This was approximately:
22.98% below the updated fair value
That gives the two transactions clear valuation support independent of their Bollinger Band classification.
The lower Bollinger Band helped us with execution timing.
The margin of safety supported ownership.
The ₱100,000 Capital Deployment Plan
MER’s portfolio role is:
Secondary Low Volatility Dividend Harvester with Regulatory Event-Risk Overlay
It is not primarily a rotational position.
Therefore, the purpose of deployment is not to buy near the lower band and automatically sell near the middle band.
The purpose is to build a long-term dividend position at a sufficient discount to fair value.
The governing rule becomes:
MER may be progressively deployed up to its ₱100,000 allocation while trading inside the ₱445–₱476 deep-value zone, provided the ₱595 fair-value estimate, earnings capacity, and dividend thesis remain intact.
The lower Bollinger Band improves entry quality, but it is not the main authority.
Current Deployment
The current position is:
60 shares
Average Price Net: ₱488.7095
Capital Deployed: ₱29,322.57
Deployment: 29.32%
Remaining Capacity: ₱70,677.43
This is already a meaningful position, but it is still far from the full ₱100,000 allocation.
Stage 1: Build Toward 60%–70% Deployment
Before the dividend record date, the practical target is:
Approximately 130–150 total shares
That means adding:
70–90 shares
depending on price availability inside or near the deep-value zone.
At prices between ₱445 and ₱476:
At 130 Total Shares
Estimated deployed capital:
Approximately ₱60,473–₱62,643 before new charges
Estimated deployment:
Approximately 60%–63%
At 140 Total Shares
Estimated deployed capital:
Approximately ₱64,923–₱67,403
Estimated deployment:
Approximately 65%–67%
At 150 Total Shares
Estimated deployed capital:
Approximately ₱69,373–₱72,163
Estimated deployment:
Approximately 69%–72%
This is the preferred dividend-participation range before the August 28 record date.
It is large enough to make the dividend contribution meaningful, but still preserves 28%–40% of the allocation for:
- deeper prices;
- post-dividend adjustment;
- fresh regulatory information;
- or an updated valuation change.
Stage 2: Move Toward Full Deployment
Full deployment remains allowed inside the ₱445–₱476 zone, but it does not need to happen solely because the dividend record date is approaching.
A practical full position would likely be:
Approximately 200–210 shares
depending on the weighted average execution price and transaction charges.
At 200 Total Shares
Estimated capital deployed would be approximately:
₱91,623–₱95,963 before new charges
At 210 Total Shares
Estimated capital deployed would be approximately:
₱96,073–₱100,723 before new charges
Therefore:
200 shares is the cleaner full-position target.
A 210-share position may fit only when the additional purchases are concentrated toward the lower half of the deep-value zone and total transaction charges remain inside the ₱100,000 ceiling.
The ceiling remains more important than reaching a particular share count.
Estimated Participation in the September Dividend
The declared dividend is:
₱11.758 per eligible share
These are gross estimates before any applicable withholding or broker-level tax treatment.
Current 60 Shares
Estimated gross dividend:
₱705.48
At 130 Shares
Estimated gross dividend:
₱1,528.54
At 140 Shares
Estimated gross dividend:
₱1,646.12
At 150 Shares
Estimated gross dividend:
₱1,763.70
At 200 Shares
Estimated gross dividend:
₱2,351.60
At 210 Shares
Estimated gross dividend:
₱2,469.18
The target of 130–150 shares before the record date would therefore produce an estimated gross dividend participation of:
₱1,528.54 to ₱1,763.70
Actual net cash received will depend on the applicable withholding and broker processing.
Eligibility also remains subject to the applicable ex-dividend, settlement, and record-date mechanics.
Why We Are Not Forcing 100% Deployment Before the Dividend
The dividend is an important part of the MER thesis.
But it should not become the reason to disregard price and risk.
A dividend is not free money.
The market price may adjust around the ex-dividend date. More importantly, an investor who deploys at an unattractive price merely to receive the dividend may exchange part of the purchase price for cash without improving total economic value.
Our stronger justification is:
- MER is intended as a dividend-harvesting position;
- the updated fair value remains near ₱595;
- the deep-value zone begins near ₱476;
- and the earnings and dividend evidence remain intact.
The dividend may accelerate deployment.
It should not override valuation.
What Could Pause the Deployment Plan?
The plan should pause if new evidence materially changes the thesis.
Examples include:
- normalized core EPS falling materially below ₱46;
- the regular 50% payout becoming difficult to sustain;
- an adverse regulatory outcome permanently reducing DU economics;
- debt or financing costs weakening dividend capacity;
- significant deterioration in receivables or cash collection;
- or major underperformance from Power Generation projects.
The company’s first-half results show meaningful growth, but they also show heavy CAPEX, rising debt exposure, and ongoing ERC review.
These risks justify staged deployment.
They do not currently invalidate the updated fair value.
Final Updated Valuation and Deployment Reading
Updated Fair Value
₱595 per share
Practical Fair-Value Reference
Around ₱600
Ordinary Buy-Below
Approximately ₱505
20% Margin of Safety
Approximately ₱476
25% Margin of Safety
Approximately ₱446
Deep-Value Accumulation Zone
Approximately ₱445–₱476
Current Position
60 shares at ₱488.7095 average price net
Current Deployment
₱29,322.57 or 29.32%
Pre-Record-Date Target
130–150 shares or approximately 60%–70% deployment
Estimated Gross September Dividend at Target
Approximately ₱1,528.54–₱1,763.70
Eventual Full Position
Approximately 200–210 shares, subject to the ₱100,000 ceiling
Deployment Principle
Progressive, valuation-led accumulation for dividend ownership—not mandatory full deployment for dividend capture.
Pangwakas na Kaisipan
The updated valuation did not produce a dramatic new fair-value number.
The old reference was ₱600.
The updated estimate is ₱595.
Halos pareho.
Pero mas matibay na ngayon ang basis.
May six months of actual 2026 earnings na tayo. May confirmed interim dividend. May growing Power Generation contribution. At may clearer view na rin tayo sa debt, CAPEX, receivables, at regulatory uncertainty.
The market price fell much faster than reported earnings.
Our response was not to deny the risk.
It was to measure the discount.
At the ₱454 and ₱462.50 purchase prices, the margin of safety was already inside the 20%–25% range.
That supports further accumulation while the stock remains in the deep-value zone—especially because MER is intended for dividend harvesting, not short-term rotation.
But a ₱100,000 allocation is still a ceiling.
It is not a deadline.
Our immediate objective before the dividend record date is not necessarily to reach 100%.
It is to build a meaningful 130–150-share position, representing approximately 60%–70% deployment, while preserving enough capital for whatever the market or the regulatory story gives us next.
Aba’y may dividend na darating.
Pero mas mahalaga pa rin kung anong klaseng ownership ang dala natin pagkatapos dumating ang dividend.
We are not buying MER merely to receive one payment. We are building the dividend position while the price offers a meaningful discount to value.
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For now, the PSE’s Shariah-Compliant Securities page and all past lists have been removed from the public website. The December 24, 2024 list is the last official version in Micro Stock Trader’s possession, downloaded before the page was taken down, although other investors may still hold later copies such as the reported July 4, 2025 release.
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This post is for educational and documentation purposes only. It is not investment advice. Perform your own due diligence and consult qualified financial professionals before making investment decisions. All strategies, frameworks, and examples described here reflect the personal methodologies of Micro Stock Trader and are not guarantees of future performance.
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