Alerts

   Justin Richmond Cheng, CFA

Reiterate HOLD rating due to valuations We currently have a HOLD rating on URC with a FV estimate of Php177/sh. Although URC is showing more convincing signs of a turnaround, we believe valuations are not attractive. At its current price of Php151/sh, URC is still trading at 30X 2019E P/E, which is broadly in line with URC’s historical average P/E and above average multiple of peers

   Justin Richmond Cheng, CFA

Reiterate HOLD rating due to valuations We currently have a HOLD rating on URC with a FV estimate of Php177/sh. Although URC is showing more convincing signs of a turnaround, we believe valuations are not attractive. At its current price of Php151/sh, URC is still trading at 30X 2019E P/E, which is broadly in line with URC’s historical average P/E and above average multiple of peers

   Adrian Alexander Yu

   Justin Richmond Cheng, CFA

Reiterate BUY rating. We reiterate our BUY rating for CNPF. At its current price of Php15.1/sh, CNPF is trading at only 16.9X 19E P/E, a discount relative to the 21X average 2019E P/E of its peers. We believe that CNPF deserves to trade at similar multiples to its peers given its similarly attractive medium-term outlook, the strong brand equity of its product portfolio and proven track record of growing revenues and profits. The strong performance of its milk segment also strengthens our conviction that the company can meet our double digit 2019 and 2020 earnings growth forecasts.

   Frances Rolfa Nicolas

Speaker Alan Peter Cayetano said that he had personal objections to the renewal of the franchise of ABS. Recall that the Speaker was the running mate of President Duterte in the 2016 elections. Nevertheless, Mr. Cayetano promised that the House of Representatives would be fair to the media company. Note that at least 6 bills have already been filed seeking the renewal of ABS’ franchise, which will expire on March 2020.

   Frances Rolfa Nicolas

MacroAsia Corp. announced that it will be acquiring 30% of Tokyo based NKS Holding Co. Ltd’s shares in Japan Airport Service Corporation (JASCO), the ground handling unit at Narita Airport of Konoike Transport Co. Ltd. Note that JASCO’s parent company is NKS Holding, which is also a subsidiary of Konoike Transport. In turn, Konoike will also acquire a 20% stake in MASCORP, MacroAsia’s ground handling unit, valuing the transaction at 2.3Bil Yen or Php1.06Bil. As for the 30% stake of JASCO shares sold by Konoike Transport, the amount is estimated to be 1.8Bil Yen or Php830Mil.

   Adrian Alexander Yu

The PLDT Global Corp. has partnered with I-Remit, Inc. through a payment service app Free Bee which is an ad-based mobile phone app payment service recognized a Telecom Asia's "most innovative voice solution". This will allow OFWs to make international calls without the internet or a smartphone.

   George Ching

Maintaining BUY rating. We have a BUY rating on AP with a FV estimate of Php43.55/sh. Based on AP’s current market price of Php40.4/sh, upside to our FV estimate is at 7.8%. The stock is now trading at 12.8X 2019E P/E, almost at par with its 10-year historical average P/E of 12.3X and the 12X average P/E of industry peers currently. AP’s profits are still projected to grow by a CAGR of 7.8% from 2017 to 2020, the fastest in the power sector, even with lower contract prices and rising coal costs. AP’s vertically integrated nature (due to the fact that it owns both power generation and distribution facilities) also secures its ability to expand its power generation portfolio despite concerns of oversupply in the market.

   George Ching

Maintaining BUY rating. We have a BUY rating on AP with a FV estimate of Php43.55/sh. Based on AP’s current market price of Php40.4/sh, upside to our FV estimate is at 7.8%. The stock is now trading at 12.8X 2019E P/E, almost at par with its 10-year historical average P/E of 12.3X and the 12X average P/E of industry peers currently. AP’s profits are still projected to grow by a CAGR of 7.8% from 2017 to 2020, the fastest in the power sector, even with lower contract prices and rising coal costs. AP’s vertically integrated nature (due to the fact that it owns both power generation and distribution facilities) also secures its ability to expand its power generation portfolio despite concerns of oversupply in the market.

   Richard Lañeda, CFA

RLC reported 9-month net income increase of 11.7% brought by the revenues from its Chengdu project. Results exceeded both COL and consensus estimates. We are maintaining a BUY rating on RLC with FV estimate of Php29.82.