Alerts

   George Ching

November 08, 2024. Maintaining HOLD rating. We have a HOLD rating on ACEN with a FV estimate of Php5.90/sh. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewable energy. From ~6,754MJW currently, the company plans to add ~2,000MW of capacity annually for the next 3 years. The share price of ACEN has appreciated by 7.1% in the YTD period following the company’s continued capacity expansion. Upside to our FV estimate is at 25.8%.

   Charmaine Co

November 05, 2024. Realigning estimates, Maintain HOLD. We maintain our HOLD rating on UBP with an FV estimate of Php41.9/sh, based on 1.0x 2024E P/B ex-goodwill (or 0.7x 2024E P/B inclusive of goodwill). 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, it has been facing challenges in asset quality. We expect that the build-up of provisions to cover unexpected losses from riskier assets will continue to weigh on earnings growth.

   George Ching

November 05, 2024. Maintaining HOLD rating. We have a HOLD rating on AEV with a FV estimate of Php60.3/sh. We are maintaining our HOLD rating on AEV. We continue to like AEV given the prospects of its power subsidiary AP. AEV is also well positioned to benefit from the country’s growing infrastructure programs owing to its investment in republic cement as well as its strong balance sheet and excellent track record in acquiring businesses. However, key business units such as Republic Cement continue to be negatively affected the weakness in overall demand, cost inflation as well as elevated interest rates.

   George Ching

November 05, 2024. Maintaining BUY rating on AP. We have a BUY rating on AP with a FV estimate of Php51.8/sh. We like AP as we believe that its long- term earnings growth outlook has improved following the ramp up of its renewable energy capacity expansion initiative. Furthermore, valuation is also cheap, trading at 9.9X FY24 P/E, compared to AP’s 10- year historical P/E of 13.7X. Based on its 2024 cash dividend of Php2.3/sh, this provides a decent dividend yield of 6.1%. The upside to our FV estimate is significant at 38.4%.

   George Ching

November 05, 2024. Maintaining BUY rating on SCC. We have a BUY rating on SCC with a FV estimate of Php52.2/sh. SCC is trading at 5.8X FY24 P/E, below its 10 year historical P/E of 11.6X. Based on its actual 2023 cash dividend of Php6/sh, this provides a very high dividend yield of 18.8%. Upside to our FV estimate is also very high at 63.5%.

   Denise Joaquin

October 31, 2024. Lowering FV estimate to Php81.9/sh; maintain BUY. We are lowering our FV estimate on RRHI to Php81.9/sh from Php85.30/sh previously as we account for RRHI’s weaker-than-expected top-line results and our higher valuation for RRHI’s stake in BPI. After factoring in our adjustments, our FV estimate on RRHI declined to Php81.9/sh from Php 85.30/sh previously. We maintain our BUY rating on the stock as we expect further recovery in earnings this year to be driven by wage hikes that could alleviate tightened consumer spending. Based on our estimates, the market is valuing RRHI’s retail business (excluding the fair value of its stake in BPI) at only 5.1X 2024E P/E, below the 8.7X median 2024E P/E of its peers in the sector.

   Charmaine Co

October 30, 2024. Maintain BUY. We currently have a BUY rating on BDO with an FV estimate of Php164.0/sh, based on 1.5x 2024E P/B. We believe that BDO, as the largest bank in the Philippines, is well-positioned to capture growth opportunities as the Philippine economy expands by leveraging its wide branch network as well as its connection with the SM group. Having a strong, liquid balance sheet and healthy capital ratios also gives the bank flexibility to pursue new avenues of growth. Even as the BSP cuts rates, we think downward pressure on NIM will be offset by changes in the bank’s asset mix as well as the positive impact from the reduction in reserve requirements. We also see potential upside on earnings coming from trading gains as interest rates fall and reduction in provisioning.

   George Ching

October 29, 2024. Downgrading to HOLD rating. We are downgrading our rating on MER to HOLD from BUY. We are maintaining our FV estimate on MER at Php536/sh. We like MER given its predictable and stable cash flow from its power distribution business. We also like MER as its profitability is least vulnerable to the risks facing the power industry (volatility in WESM and commodity prices and unplanned outages) because bulk of its profits come from the distribution business. However, MER’s share price has risen by 23.15% in the YTD period, outperforming the PSEI’s 12.3% gain during the same period. Based on MER’s current market price of Php492/sh, upside to our FV estimate is limited at 8.8%.

   Denise Joaquin

October 29, 2024. Cutting FV estimate to Php16.7/sh; maintain HOLD rating. We are lowering our earnings estimates on WLCON following the company’s weaker-than-anticipated 9M24 results. In particular, we trimmed our revenue forecasts by 6.1% for FY24 and 6.0% for FY25. Our revised revenue forecast for FY24 implies flattish revenue growth and mid-single digit decline in SSSG for the full year. We also reduced our EBIT margin assumptions by 210bps for FY24 and 170bps for FY25, reflecting our weaker demand expectations and industry-wide price reductions on merchandise. Overall, our net income forecasts declined to Php2.8Bil (-21.9%) for FY24 and Php3.4Bil (-17.1%) for FY25. As a result of the changes in our forecasts, we lower our FV estimate on the stock to Php16.7/sh from Php20.20/sh previously. Given the limited upside to our revised FV estimate, we maintain our HOLD rating on WLCON.

   Paolo Miguel Manansala

October 18, 2024. Downgrading FV estimate, maintaining BUY rating. We are downgrading our core net income estimates by 9.9% to Php5.5Bil for FY24 and by 35.0% to Php6.1Bil for FY25. This led to a decrease of 9.2% to Php53/sh in our FV. However, we are maintaining our BUY rating for the stock. We continue to favor CEB for its strong foothold in the aviation industry, accounting for 36.8% of total passengers flown in the period. Potential headwinds include a stronger dollar and conflicts in the Middle East, which could drive up expenses.