Alerts

   Frances Rolfa Nicolas

PCOR’s 3Q19 earnings dropped 61.6% y/y to Php980Mil, as volumes continued to decline and refining margins remained weak. Management noted that that the decline in volumes was brought about by the Bataan refinery’s maintenance shutdown and prevalent oil smuggling in the industry. Moreover, petrochemical cracks slid down, outweighing the slight expansion of gas and diesel cracks during the quarter. This brought 9M19 earnings to Php3.6Bil, down 70.1% y/y. More details following the briefing on Thursday.

   Adrian Alexander Yu

Maintaining Hold. We are reducing our earnings estimates for IMI given the weaker than expected performance for the first nine months of 2019. We reduced our revenue forecast by 4.3% and 3.8% for 2019 and 2020 respectively after factoring weaker revenues and margin squeeze. Moreover, we reduced our net income forecast by 24.9% and 9.7% for 2019 and 2020 respectively. After factoring in our earnings adjustments, we reduced our fair value estimate by 7% to Php9.4/sh from Php10.1/sh, while maintaining our HOLD recommendation on IMI. We remain cautiously optimistic on IMI that there should be a slow recovery in 2020. At its current price of Php8.04/sh, capital appreciation is not that compelling at 16.9% given the uncertainty of a 2020 recovery and the continued pressure from overhead charges.

   Richard Lañeda, CFA

We are raising our 2019 and 2020 net income estimates by 2.11% and 4.02% to Php37.76 Bil and Php43.07 Bil respectively. We also raise our fair value estimate by 1% to Php42.70 per share. However, we are still maintaining our HOLD rating on SMPH. At the current price of Php39.75, upside to our fair value estimate of Php42.70 is just 7.4%. We advise that investors wait for the share price to pull back to more attractive level of Php37.1 or lower before buying.

   Frances Rolfa Nicolas

In a disclosure to the PSE, CEB announced that it signed a purchase agreement with Airbus SAS for the order of 16 A330-900 aircraft, valued at US$4.8Bil.

   Richard Lañeda, CFA

We are rolling over of our estimates from 2019 to 2020. For 2020, we forecast the PSEI’s EPS to grow by 8%, slower than the 13% EPS growth in 2019.

   Adrian Alexander Yu

Dito Telecommunity Corporation aims to corner 30% of the telecom market within two to three years. The company recently signed deals with key partners and tower providers, China Energy Equipment Co. Ltd. and Filipino-Malaysian Consortium ZEAL Power Construction & Development Corp in order to provide fast, affordable and safe internet connectivity in a timely manner. Note that Dito, which is controlled by Udenna Corp (ISM) and Chelsea Logistics (C), has a tight timeline of serving 37% of the country’s population by July 2020 while delivering a minimum broadband speed of 27 Megabits per second (Mbps). It remains to be seen how the company manages the tight deadline as it continues to make headway signing partnership and MOUs with different companies to speed the roll out process.

   Adrian Alexander Yu

We will be reviewing our estimates for a potential downgrade in light of the weaker-than-expected results. We currently have a HOLD rating on IMI with an FV estimate of Php10.10/sh.

   Richard Lañeda, CFA

ALI is investing Php8Bil in an 11-hecatare pocket urban development located in Barangay Talipapa between Quirino Highway and Tandang Sora Avenue. The estate, The Junction Place, will feature residential, commercial and recreational components. The company has already sold around 8,000 sq.m. of commercial lots facing the spine road to spur economic activity, and is building a transport hub and UV Express terminal to boost the estate’s connectivity to other parts of Quezon City and Metro Manila.

   Justin Richmond Cheng, CFA

AXLM is investing in Php250Mil to expand part of its production facilities in order to better capture the growing market for coconut-based products. In fact, the company expanded its spray-drying line as part of AXLM’s overall upgrade. This expansion will allow AXLM to increase its capacity of coconut milk powder to 20 metric tons (MT) per day from 10 MT. This would translate to an annual total capacity of 4,800 MT for the said product. AXLM said it recently bagged a new order for coconut milk powder, which will be used as an ingredient for skin care and product supplement. The initial order is for exporting 170 MT, amounting to around US$1.3Mil.

   George Ching

Maintaining HOLD rating. We have a HOLD rating on NIKL with a FV estimate of Php4.01/sh. While we believe that the long term outlook for nickel prices will remain positive due to rising EV battery demand and the looming Indonesian ore export ban, we believe that this has already been priced-in by the market. NIKL’s share price has risen by 76.3% YTD, outperforming the PSEi’s 4.6% rise during the period. At its current price of Php3.88/sh, upside to our FV estimate is limited at 3.35.