Alerts

   George Ching

Maintaining our BUY rating on FPH. We have a BUY rating on FPH with a FV estimate of Php143.6/sh. Given FGEN’s improved earnings outlook and FPH’s 64.4% ownership in FGEN, we view FPH as a cheaper way to own FGEN. FPH is trading at a huge 46% discount to its market based NAV of Php145/sh. Based on FPH’s market price of Php78.35/sh, upside to our FV estimate is significant at 83%.

   Richard Lañeda, CFA

We maintain our BUY rating on AGI following the favorable 9M19 income of the group. In addition, AGI’s share are priced at a 47.3% discount to its market price-based NAV of Php22.02. We believe at this price the market has factored in much of the downside for AGI. In the short term, we may see continued pressure on the share price because of the MSCI rebalancing where in AGI was removed from Philippine big cap index and added to the Philippine small cap index. The rebalancing should be done by Nov. 26.

   Richard Lañeda, CFA

We maintain our BUY rating on AGI following the favorable 9M19 income of the group. In addition, AGI’s share are priced at a 47.3% discount to its market price-based NAV of Php22.02. We believe at this price the market has factored in much of the downside for AGI. In the short term, we may see continued pressure on the share price because of the MSCI rebalancing where in AGI was removed from Philippine big cap index and added to the Philippine small cap index. The rebalancing should be done by Nov. 26.

   Richard Lañeda, CFA

Maintaining BUY rating with FV estimate of Php15.32. We reiterate our BUY rating on BLOOM with a fair value estimate of Php15.32. We like BLOOM for being the leader in the local gaming sector and the only listed pure gaming operator in the PSE. The exceptionally high hold rate of the VIP segment this year has been a welcome surprise but we also like the sustained uptrend in the grind segment which is more sustainable over the longer term.

   Justin Richmond Cheng, CFA

FRUIT priced its initial public offering (IPO) at Php1.68/sh. The food and beverage kiosk operator will start its offer period from November 18 to 22. The company will offer 533.7Mil primary shares with an over-allotment option of up to 68.3Mil shares to be sold by the selling shareholder. This is expected to raise up ~Php900Mil funds for the company.

   Justin Richmond Cheng, CFA

Valuations. There is currently no consensus estimate on PIP. At Php1.53/sh, PIP is trading at approximately 10x 2019 P/E after annualizing its 9M19 core net income. Note that this assumes that PIP will be able to book around Php160Mil in 4Q19 profits, which is not a sure thing given the flattish topline and GPM contraction in 3Q19.

   Justin Richmond Cheng, CFA

Valuations. Based on AllHome’s expansion plan, it will end 2020 with close to 70 stores. After factoring in the savings on finance cost brought about by the repayment of debts and assuming that the newly opened stores will perform at par with the existing stores, AllHome could book around Php2Bil in net income next year. This would be around 65% higher than the Php1.2Bil AllHome is expected to earn in FY19 based on its 9M19 results. At Php11.30/sh, AllHome is trading at around 21X 2020 P/E, which is below the 25X average 2020 P/E of its peers.

   Justin Richmond Cheng, CFA

Maintain HOLD rating. We are maintaining our HOLD rating on EMP with a FV estimate of Php8.0/sh. At its current price of Php7.20/sh, upside potential to our FV estimate is not yet significant. EMP is already trading near our FV estimate. Although EMP is trading at just 16X 2019E P/E, a discount to the consumer sector average of around 21X, we believe that sentiment for the stock will remain poor given the looming alcohol excise tax hike domestically that could hurt EMP’s revenues and profits once it is implemented.

   Justin Richmond Cheng, CFA

Maintain HOLD rating. We currently have a HOLD rating on JFC with a FV estimate of Php248.0/sh. We believe JFC’s near-term outlook remains poor as it faces challenges in turning around Smashburger and from rising meat prices in light of the African Swine Fever outbreak in the Philippines and China. It will also be consolidating CBTL in 4Q19 which will drag profitability in the near term as CBTL is still in the red. At Php202.6/sh, JFC is trading at 32.1X 2020E P/E, which is a premium relative to the 27.8X average P/E of its global peers.

   Justin Richmond Cheng, CFA

We are maintaining our BUY rating on COSCO with a FV estimate of Php12.8/sh. COSCO remains severely undervalued with the market not valuing its other businesses (apart from PGOLD) like the liquor distribution and real estate business. In fact, if we only value COSCO (adjusting for parent net debt) for its 49% stake in PGOLD based on the latter’s market value, this still translates to a target price of Php8.9/sh, presenting a 29% upside to COSCO’s current price. COSCO also recognizes the severely low market valuation of its company. As such, the company has been more aggressively buying back their shares. Under their current buyback program, COSCO has repurchased 161,640,400 shares at an average price of Php6.7/sh.