Alerts

   Paolo Miguel Manansala

May 15, 2024. We currently have a BUY rating on CEB with an FV estimate of Php58.4/sh. With international travel continuing its recovery to pre-pandemic levels, we remain positive about CEB’s outlook given the growth in passenger volume and higher yields. However, risks may include fuel price volatility, weakening of the peso, and increased expenses amid Pratt and Whitney engine issues and fleet expansion. At current prices, the upside to our FV is significant at 100.1%.

   Charmaine Co

May 15, 2024. We are maintaining our BUY rating on MBT with a FV estimate of Php84.6/sh, based on 1.0x 2024E P/B. This was adjusted from our previous FV estimate of Php87.0/sh (based on 1.0x 2024E P/B) to account for the Php5.0/sh cash dividend that MBT is distributing this year. With a strong and highly liquid balance sheet, we think that MBT is positioned for growth as economic activity increases and demand for loans goes up. MBT is also very well-capitalized, with one of the highest CET1 ratios among banks. This gives the bank flexibility, not only in growing its loan book, but also in distributing dividends. It currently has the highest dividend yield among banks at ~7%. Furthermore, the stock is trading at a discount vs peers at 0.8x P/B (vs BDO’s 1.3x and BPI’s 1.6x).

   George Ching

May 15, 2024. In light of the reduction in our earnings forecast, we are cutting our FV estimate for NIKL by 4.2% to Php5.75/sh. We remain positive on the long term outlook for nickel due to the rising EV battery demand. Furthermore, we believe that NIKL’s expansion of its RE power generation business comes at an opportune time given the strong cash flow generation of its nickel mining business, as well as the tightening of power supply in the country. However, we believe that near term outlook for nickel price will continue to be challenging given the slowdown in China’s economic growth. At its current price of Php4.02/sh, upside to our FV estimate is at 43%.

   Denise Joaquin

May 14, 2024. In light of the better-than-expected results, we are raising our net income forecasts for MONDE by 15.8% for FY24 and 6.5% for FY25. This was driven by our lower opex projections and our higher GPM forecasts to reflect the company’s more favorable commodity lock-ins for most of the year. As a result of the changes in our forecasts, our FV estimate on MONDE increased to Php13.0/sh from Php11.9/sh previously. We reiterate our BUY rating on the stock as we expect steady topline growth and margin expansion driving its core branded business. Additionally, we believe that sentiment on the stock has largely turned around as concerns over further impairment losses for MAB and dividend payment risks may be addressed by MONDE’s 10-year risk reduction plan, which will provide retained earnings protection for the listco at the equity level.

   Denise Joaquin

May 14, 2024. We are reducing our earnings estimates on WLCON in light of the weaker-than-expected results. After factoring in our adjustments, our FV estimate on WLCON declined to Php20.22/sh from Php22.4/sh previously. While we continue to like WLCON fundamentally for its market leadership in the home improvement space and its long-term store network expansion strategy, we think that sentiment on the stock could remain subdued without a visible recovery in demand from the consumer market for home improvement. We also note that results have repeatedly missed on top-line and bottom-line expectations, which could warrant WLCON’s depressed valuations (20.5X FY24E P/E).

   Charmaine Co

May 14, 2024. We are also revising our FV estimate down to Php42.4/sh, based on 1.0x 2024E P/B ex-goodwill (or 0.72x 2024E P/B inclusive of goodwill), and downgrading our recommendation from BUY to HOLD. This can be attributed to the addition of shares from UBP’s recent stock rights offering, alongside emerging concerns regarding the bank’s asset quality. While we continue to expect growth in UBP’s lending business as it pursues cross-sell opportunities within its client base and taps into underserved markets, its NPL ratio has been steadily rising quarter after quarter. We expect that the build-up of provisions to cover unexpected losses from riskier assets will continue to weigh on earnings growth.

   George Ching

May 14, 2024. We have a BUY rating on FPH with a FV estimate of Php156/sh. We are maintaining our BUY rating on FPH. Given FPH’s 68% ownership in FGEN, we view FPH as a cheaper way to own FGEN. FPH is trading at a huge 57% discount to its market based NAV of Php129/sh. Based on FPH’s market price of Php64.55/sh, upside to our FV estimate is significant at 142%.

   Paolo Miguel Manansala

May 13, 2024. We have a HOLD rating on JGS with an FV estimate of Php51.8/sh. We like JGS as its core businesses are showing signs of improvement and are likely to benefit from the long-term growth outlook of the Philippine economy. However, due to the nature of its businesses, higher interest rates and rising inflation may hinder the growth of the company.

   Richard Lañeda, CFA

May 10, 2024. We maintain our BUY rating on MEG given its robust residential segment and recovering malls and hotels. Its office segment remains a steady source of income and a strong anchor of the company’s value. Shares of MEG are attractively valued, it is trading 60% below our fair value estimate.

   Paolo Miguel Manansala

May 10, 2024. We have a HOLD rating on ICT with an FV estimate of Php221/sh. We are maintaining our HOLD rating on ICT because of the favorable success of its greenfield ports in Australia, Congo and Rio as well as its continued expansion throughout various regions. However, ICT has limited upside amid the share price appreciating by 35.6% YTD.