Manawa Energy (NZSE:MNW) - Share price, News & Analysis

Q: What is the Fair Price of MNW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

MNW (NZ$6.1) is trading below our estimate of [[fair value]] (NZ$9.67)

MNW fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	4/6
Financial Health	2/6
Dividends	2/6

MNW Stock Overview

Manawa Energy Limited engages in the ownership and operation of electricity generation facilities in New Zealand.

Rewards

Trading at 36.9% below our estimate of its fair value

Earnings grew by 434.7% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 1.8% per year for the next 3 years

Dividend of 10.98% is not well covered by earnings or forecast to be in the next 3 years

Has a high level of debt

Manawa Energy Competitors

Genesis Energy

NZSE:GNE

NZ$3.1b

Infratil

NZSE:IFT

NZ$6.5b

Contact Energy

NZSE:CEN

NZ$6.0b

Mercury NZ

NZSE:MCY

NZ$9.0b

Price History & Performance

Summary of all time highs, changes and price drops for Manawa Energy
Historical stock prices
Current Share Price	NZ$6.10
52 Week High	NZ$8.33
52 Week Low	NZ$5.87
Beta	0.39
1 Month Change	-2.87%
3 Month Change	-12.61%
1 Year Change	-24.22%
3 Year Change	-22.59%
5 Year Change	7.02%
Change since IPO	23.98%

Recent News & Updates

May 22

Manawa Energy's (NZSE:MNW) Dividend Will Be Increased To NZ$0.54

Manawa Energy Limited's ( NZSE:MNW ) dividend will be increasing to NZ$0.54 on 17th of June. This will take the...

Shareholder Returns

	MNW	NZ Electric Utilities	NZ Market
7D	-0.2%	0.9%	0.3%
1Y	-24.2%	-3.9%	-11.1%

Return vs Industry: MNW underperformed the NZ Electric Utilities industry which returned -3.9% over the past year.

Return vs Market: MNW underperformed the NZ Market which returned -11.1% over the past year.

Price Volatility

Is MNW's price volatile compared to industry and market?
MNW volatility
MNW Average Weekly Movement	3.1%
Electric Utilities Industry Average Movement	3.6%
Market Average Movement	4.3%
10% most volatile stocks in NZ Market	8.3%
10% least volatile stocks in NZ Market	3.0%

Stable Share Price: MNW is less volatile than 75% of NZ stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: MNW's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1915	777	David Prentice	https://www.manawaenergy.co.nz

Manawa Energy Limited engages in the ownership and operation of electricity generation facilities in New Zealand. The company is also involved in the generation of renewable electricity through hydro power schemes; and supply of water to Canterbury irrigators. It operates approximately 26 power schemes in New Zealand with a total installed capacity of 498MW.

Manawa Energy Fundamentals Summary

How do Manawa Energy's earnings and revenue compare to its market cap?
MNW fundamental statistics
Market Cap	NZ$1.90b
Earnings (TTM)	NZ$105.46m
Revenue (TTM)	NZ$322.82m

18.1x

P/E Ratio

5.9x

P/S Ratio

Is MNW overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
MNW income statement (TTM)
Revenue	NZ$322.82m
Cost of Revenue	NZ$112.66m
Gross Profit	NZ$210.16m
Other Expenses	NZ$104.70m
Earnings	NZ$105.46m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.34
Gross Margin	65.10%
Net Profit Margin	32.67%
Debt/Equity Ratio	73.0%

How did MNW perform over the long term?

See historical performance and comparison

Dividends

11.0%

Current Dividend Yield

98%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is MNW undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MNW?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for MNW. This is calculated by dividing MNW's market cap by their current preferred multiple.
What is MNW's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	NZ$1.90b

MNW key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	8.3x
Enterprise Value/EBITDA	16.6x
PEG Ratio	-9.9x

Price to Earnings Ratio vs Peers

How does MNW's PE Ratio compare to its peers?

MNW PE Ratio vs Peers

The above table shows the PE ratio for MNW vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	60.4x
GNE Genesis Energy	46.3x	2.3%	NZ$3.1b
IFT Infratil	149.8x	41.9%	NZ$6.5b
CEN Contact Energy	24.6x	1.8%	NZ$6.0b
MCY Mercury NZ	20.9x	-8.1%	NZ$9.0b
MNW Manawa Energy	18.1x	-1.8%	NZ$1.9b

Price-To-Earnings vs Peers: MNW is good value based on its Price-To-Earnings Ratio (18.1x) compared to the peer average (60.4x).

Price to Earnings Ratio vs Industry

How does MNW's PE Ratio compare vs other companies in the Global Electric Utilities Industry?

Price-To-Earnings vs Industry: MNW is good value based on its Price-To-Earnings Ratio (18.1x) compared to the NZ Electric Utilities industry average (24.6x)

Price to Earnings Ratio vs Fair Ratio

What is MNW's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MNW PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	18.1x
Fair PE Ratio	29.6x

Price-To-Earnings vs Fair Ratio: MNW is good value based on its Price-To-Earnings Ratio (18.1x) compared to the estimated Fair Price-To-Earnings Ratio (29.6x).

Share Price vs Fair Value

What is the Fair Price of MNW when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MNW (NZ$6.1) is trading below our estimate of fair value (NZ$9.67)

Significantly Below Fair Value: MNW is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Manawa Energy forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-1.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: MNW's earnings are forecast to decline over the next 3 years (-1.8% per year).

Earnings vs Market: MNW's earnings are forecast to decline over the next 3 years (-1.8% per year).

High Growth Earnings: MNW's earnings are forecast to decline over the next 3 years.

Revenue vs Market: MNW's revenue (3.3% per year) is forecast to grow slower than the NZ market (5.9% per year).

High Growth Revenue: MNW's revenue (3.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: MNW's Return on Equity is forecast to be low in 3 years time (9.2%).

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Past Performance

How has Manawa Energy performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MNW has high quality earnings.

Growing Profit Margin: MNW's current net profit margins (32.7%) are higher than last year (6.5%).

Past Earnings Growth Analysis

Earnings Trend: MNW's earnings have declined by 4.5% per year over the past 5 years.

Accelerating Growth: MNW's earnings growth over the past year (434.7%) exceeds its 5-year average (-4.5% per year).

Earnings vs Industry: MNW earnings growth over the past year (434.7%) exceeded the Electric Utilities industry 9.2%.

Return on Equity

High ROE: MNW's Return on Equity (10.4%) is considered low.

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Financial Health

How is Manawa Energy's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: MNW's short term assets (NZ$402.2M) do not cover its short term liabilities (NZ$515.5M).

Long Term Liabilities: MNW's short term assets (NZ$402.2M) do not cover its long term liabilities (NZ$730.6M).

Debt to Equity History and Analysis

Debt Level: MNW's net debt to equity ratio (72%) is considered high.

Reducing Debt: MNW's debt to equity ratio has increased from 47.8% to 73% over the past 5 years.

Debt Coverage: MNW's debt is well covered by operating cash flow (21.3%).

Interest Coverage: MNW's interest payments on its debt are well covered by EBIT (6.4x coverage).

Balance Sheet

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Dividend

What is Manawa Energy current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

10.98%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: MNW's dividend (10.98%) is higher than the bottom 25% of dividend payers in the NZ market (2.95%).

High Dividend: MNW's dividend (10.98%) is in the top 25% of dividend payers in the NZ market (5.91%)

Stability and Growth of Payments

Stable Dividend: MNW has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: MNW's dividend payments have increased, but the company has only paid a dividend for 6 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (97.9%), MNW's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (163%), MNW's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

0.9yrs

Average board tenure

CEO

David Prentice (52 yo)

2.58yrs

Tenure

NZ$1,012,483

Compensation

Dr. David Prentice, BEng (HONS), PhD, FEngNZ, serves as Chief Executive Officer of Manawa Energy Limited (formerly known as Trustpower Limited) since January 20, 2020. Dr. Prentice was an Independent Direc...

CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD636.26K) is below average for companies of similar size in the NZ market ($USD1.07M).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.

Board Members

Experienced Board: MNW's board of directors are not considered experienced ( 0.9 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: MNW insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/10 00:00
End of Day Share Price	2022/08/10 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31