Morningstar

Manawa Energy Ltd MNW

Morningstar Rating
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Stock XNZE Rating as of
NZD 4.95 −0.03 (0.60%)
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As of Delayed Price Closed

Company Report

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Manawa Energy: Contact Proposes Sensible Merger, Regulator the Main Obstacle

Adrian Atkins

Narrow-moat-rated Manawa Energy has received an attractive takeover offer from larger peer Contact Energy. The offer consists of 0.5719 Contact shares (worth NZD 4.82 at Contact’s current price) plus NZD 1.16 in cash per Manawa share. The total value of NZD 5.98 is close to our unchanged fair value estimate of NZD 6.10 per share and represents a generous 48% premium to yesterday’s closing price. Directors unanimously recommend the offer in the absence of a superior proposal and subject to a positive recommendation from the independent expert.

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Price vs Fair Value

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MNW is trading at a 24% premium.
Price
NZD 4.95
Fair Value
NZD 6.10
Uncertainty
Medium
1-Star Price
NZD 9.19
5-Star Price
NZD 9.76
Economic Moat
Brtyggk
Capital Allocation
Ztpfrsqm

Bulls Say, Bears Say

Bulls

High wholesale prices and the CPI-linked contract with Mercury underpin good earnings growth potential in the medium term, aided by investment to increase generation output.

Bears

Manawa faces volatility from hydrological conditions. Weak hydrology, caused by significantly lower inflows and lake levels, can adversely affect the generation business.

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Trading Information

Previous Close Price
NZD 4.98
Day Range
NZD 4.92–4.96
52-Week Range
NZD 3.85–5.63
Bid/Ask
NZD 4.94 / NZD 4.98
Market Cap
NZD 1.55 Bil
Volume/Avg
145,371 / 87,508

Key Statistics

Price/Earnings (Normalized)
24.00
Price/Sales
6.03
Dividend Yield (Trailing)
3.84%
Dividend Yield (Forward)
4.44%
Total Yield
3.84%

Company Profile

Manawa is New Zealand's fifth-largest electricity generator. It has about 26 hydroelectric schemes in New Zealand, producing more than 1,900 GWh of electricity in an average rainfall year. Manawa's retail business was sold in 2022. Most electricity is sold to Mercury NZ under a long-term contract.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Small Core
Total Number of Employees
143
Website
https://www.manawaenergy.co.nz

Competitors

Valuation

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Metric
MNW
MEL
GNE
Price/Earnings (Normalized)
 24.0043.8436.77
Price/Book Value
 1.301.880.86
Price/Sales
 6.033.200.75
Price/Cash Flow
 16.5023.206.30
Price/Earnings
MNW
MEL
GNE

Financial Strength

Metric
MNW
MEL
GNE
Quick Ratio
 0.370.750.71
Current Ratio
 1.131.051.18
Interest Coverage
 2.868.362.27
Quick Ratio
MNW
MEL
GNE

Profitability

Metric
MNW
MEL
GNE
Return on Assets (Normalized)
 3.04%3.19%2.43%
Return on Equity (Normalized)
 5.18%5.35%5.11%
Return on Invested Capital (Normalized)
 4.85%4.30%3.28%
Return on Assets
MNW
MEL
GNE

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