Alerts

   Denise Joaquin

August 15, 2024. Reiterate BUY. We reiterate our BUY rating on PIZZA with FV estimate of Php11.20/sh. We remain positive on the stock given PIZZA’s long-term growth prospects and leading brand positioning in the fast casual dining space. We see additional runway for growth through PIZZA’s aggressive store network expansion of its core Shakey’s brand and franchise-led growth of Potato Corner.

   Paolo Miguel Manansala

August 15, 2024. Maintaining HOLD rating. We have a HOLD rating on ICT with an FV of Php342/sh. We are maintaining our HOLD rating on ICT because of the limited upside amid its recent price action. Currently, ICT’s share price has appreciated by 43.7% YTD. However, we do believe that the company will continue to benefit from its continued expansion of current and new ports moving forward.

   Paolo Miguel Manansala

August 15, 2024. Revising estimates amid petrochemical segment continued struggles We currently have a HOLD rating on JGS with an FV of Php51.8/sh. Considering its recent performance, we will be reviewing estimates.

   Paolo Miguel Manansala

August 15, 2024. Revising estimates amid petrochemical segment continued struggles. We currently have a HOLD rating on JGS with an FV of Php58.1/sh. Considering its recent performance, we will be reviewing estimates.

   George Ching

August 15, 2024. Maintaining BUY rating. We have a BUY rating on FPH with a FV estimate of Php158/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 50% discount to its market based NAV of Php124/sh. Based on FPH’s market price of Php62/sh, upside to our FV estimate is significant at 145%.

   Charmaine Co

August 15, 2024. Maintain BUY. We currently have a BUY rating on PNB with a FV estimate of Php37.6/sh, based on 0.30x 2024E P/B (ex-goodwill). We continue to view PNB as a deep value play, given that it is only trading at 0.20x 2024E P/B (ex-goodwill) with expected FY24 ROE at ~8%. As interest rates stay higher for longer, we expect PNB to be a net beneficiary due to its substantial low-cost deposit base. The bank is also pushing forward with its endeavors to improve profitability by reducing lowearning assets and trimming down non-performing loans.

   Charmaine Co

August 13, 2024. We are maintaining our BUY rating on CBC with a FV estimate of Php42.9/sh, based on 0.7x 2024E P/B. We expect CBC’s lending business to continue growing alongside the Philippine economy in the years to come, with prudent management of costs and asset quality enhancing profitability. We also see potential upside on the bank’s NIM after the BSP cuts its key policy rate, which would be driven by the growing proportion of consumer loans in its loan book as well as the build-up of investment securities locked in at higher rates. Ultimately, we see CBC as an attractive investment opportunity. Factoring in size and liquidity considerations, it is still trading at 0.6x 2024E P/B, with anticipated ROE of 15.4%. in comparison, banks such as BDO and BPI, with similar ROE, are trading at relatively higher multiples (BDO – 1.3x, BPI – 1.5x).

   George Ching

August 13, 2024. Maintaining BUY rating. After factoring in the acquisition of the Casencan Hydro into our forecast, we are slightly lowering our FV estimate for FGEN by 2.2% to Php30.8/sh. We continue like FGEN given its relatively stable cash flow since bulk of its capacity is contracted. Furthermore, with the Department of Energy’s moratorium on new coal power plants, this could potentially push forward the projected power shortage beginning in 2024, increase in the competitiveness of FGEN’s gas and renewables plants, and improve the feasibility of FGEN’s LNG regasification project which will enable its gas plants to remain viable after the depletion of the Malampaya gas field. At FGEN’s market price of Php18.8/sh., upside to our FV estimate is at 81.4%.

   George Ching

August 13, 2024. Maintain BUY with FV of Php26.20. We maintain our BUY rating on RLC as as robust consumer spending should benefit the second biggest mall operator in the Philippines. Meanwhile, RLC maintains a positive outlook on its residential segment despite the 1H24 setback in reservation sales and booked sales. Lastly, RLC has consistently bought back its shares in the open market since approving its Php6 Bil share buyback program and even increased it to Php9 Bil, also confirming our view that shares are undervalued. Our fair value estimate of Php26.20 for RLC is based on a 35% discount to our NAV estimate of Php40.24.

   Denise Joaquin

August 13, 2024. Following the miss in URC’s first half results, we are cutting our earnings projections on the company as we factor in the faster-than-expected contraction in margins of Sugar and Renewables (SURE). In particular, we are trimming our core net income forecasts to Php12.6Bil (-10.9%) for FY24 and Php14.0Bil (-13.3%) for FY25, driven by our lower revenue and margin forecasts for SURE. As a result of the changes in our forecasts, we are revising our FV estimate on URC down to Php133/sh (-10% from Php148/sh previously) but maintain our BUY rating on the stock. We remain largely optimistic that volume recovery and favorable lock-ins for BCF should continue to drive earnings recovery for the branded segment going forward. However, we note that challenging industry dynamics in Sugar could keep profits subdued against tougher comparables in the second half of the year.