Alerts

   John Martin Luciano, CFA

FRUIT disclosed that it had completed the acquisition of Heat Stroke Grill, which has two outlets located in the Fruitas food parks in Quezon City. The company intends to make Heat Stroke Grill an anchor locator in the future food parks it may operate in the future.

   Frances Rolfa Nicolas

PCOR has rolled out fuel marking in its refinery in Bataan and import facility in Misamis Oriental. Management said this move is in support of the government’s efforts to address fuel smuggling, which has been a deterrent to the growth of the economy. Note that fuel marking involves the use of low concentrations of markers that will be blended with fuel to mark the stage it has undergone and whether it has gone through the legal import channels.

   Frances Rolfa Nicolas

CHP has finalized the terms of its stock rights offering. The company will be offering 1.5963 rights share for every 1 common share at an offer price of Php1.54 per rights share (26% discount to current price) to existing common shareholders as of ex-rights date January 9, 2020. With a total of 8.3Bil shares to be offered, CHP will be raising Php12.8Bil from the rights offering. The proceeds will be used to fund the expansion of CHP’s Solid Cement plant, including to pay outstanding amounts owed to parent company, Cemex Asia B.V. Based on these numbers, we will be reducing that our FV estimate from Php2.1/ sh to Php1.8/sh on the ex-date of the rights offering. We currently have a SELL rating on CHP.

   John Martin Luciano, CFA

Coconut manufacturer Axelum (AXLM) is expecting its FY19 revenue to hit Php5.5Bil and projecting to hit at least Php6Bil for FY20. AXLM is getting a new fully operational spray facility in 1H20, which is expected to boost production capacity and increase revenues. AXLM President and COO Henry Raperoga mentioned that AXLM’s FY19 bottom-line may reach Php800Mil, after reporting a net income of Php609Mil for 9M19, and the company is on-track to hit the Php1Bil mark for FY20. AXLM is currently in talks with at least three local firms for prospective acquisitions and expects these deals to materialize in 2H20.

   Frances Rolfa Nicolas

Rep. Edcel Lagman said that he would file a resolution on Jan. 6 to push the committee on legislative franchises to act on ABS’ franchise renewal. Recall that ABS’ franchise is set to expire in March. Mr. Lagman also urged his fellow House members to act independently in exercising exclusive congressional jurisdiction on the grant of franchises.

   Richard Lañeda, CFA

ALI said it is still looking to push through with its real estate investment trust (REIT) offering this 2020. The company will do the REIT filing and seek all necessary approvals once the SEC and BIR finalize the implementing rules and regulations. ALI added that it is going to place its prime Makati Business District office assets under a REIT for a valuation of US$500Mil. Through this REIT offering, ALI is looking to raise US$300Mil. Note that the SEC is targeting to release the complete guidelines for REITs in early 2020. However, there are some concerns from stakeholders and regulators regarding the minimum public ownership requirement.

   Adrian Alexander Yu

TEL is pushing through with the sale of some of its assets and its remaining stake in Rocket Internet this year to support the company’s capex for 2020. The company has already received bids for Smart Tower, a 36-story office building along Ayala Avenue in Makati, as it expects to raise at least Php5Bil from this sale alone.

   Frances Rolfa Nicolas

President Duterte threatened to jail the owners of the water utilities in Metro Manila, MWC Chairman Fernando Zobel de Ayala and Maynilad Chairman Manuel Pangilinan, for alleged syndicated estafa against consumers. Recall that the two water firms earned the ire of the President over the 1997 water concession deals, which allegedly contained onerous provisions. (

   Frances Rolfa Nicolas

TV5 Chairman Manuel V. Pangilinan said that the company is open but cautious at the same time to a blocktime deal with ABS should its franchise renewal not be granted. However, Mr. Pangilinan clarified that there are no ongoing talks between the two media companies. Recall that the ABS’ franchise is set to expire on March 2020.

   Adrian Alexander Yu

Globe Telecom Inc (GLO), PLDT’s (TEL) wireless arm Smart Communications and new telco operator Dito Telecommunity have formed a joint venture to invest in a new company that will facilitate number porting services. This will bring the telco operators one step closer to implementing the Mobile Number Portability (NMP) act, which allows mobile users to switch providers without changing their number. The telcos tapped Florida based Syniverse to be their MNP service provider that will bring the technical infrastructure to perform its function of acting as a clearinghouse in implementing number portability. Under MNP Act’s implementing rules issued last July, the operators will equally share the capex for the hardware, software, and other facilities required by service provider. The telco operators and Syniverse will also have to agree on the operating and maintenance cost of the service. Syniverse estimates that the completion of the MNP services would not take longer than 18 months beginning from the establishment of the support mechanism.