Alerts

   April Lynn L. Tan, CFA

The National Telecommunications Commission (NTC) has ordered telcos to unlock mobile phones and other devices free of charge after its contract period ends. Subscribers under lockup should also be notified once their devices are eligible for unlocking. This will create greater awareness to users and will greatly benefit Mislated Consortium, the third telco player as it will be easier to switch to a different telco provider. However, we don’t think that the impact will be substantial as users who still purchase from telcos are a small portion.

   George Ching

SMC said that it aims to complete 1,200 megawatts of various renewable energy projects by 2024. These projects comprise of solar, wind, and pumped hydro. The company has already commenced initial groundwork and ordered equipment for the planned renewable energy projects. This is in line with the company’s goal to achieve 10,000 MW of new renewable energy capacity in the next 10 years.

   George Ching

SMC’s power unit is securing new funding for its two coal-fired power plants that were affected by the competitive selection process directive of the Supreme Court. Each project will have four 150-MW units and the project cost for the two plants is estimated at US$2.0 Mil per MW or around US$2.4 Bil.

   Frances Rolfa Nicolas

In a statement from the Cement Manufacturers Association of the Philippines, it said that imported cement has negatively affected the domestic cement industry. The association is also confident that the Tariff Commission will come out with a ruling consistent with the national interest after the finding of its technical staff that imports have increased their share of the domestic market at the expense of the Philippine cement manufacturing industry

   George Ching

We are reiterating our HOLD rating on DMC with a FV estimate of Php10.7/sh. We like DMC as it is poised to benefit from its investment in SCC and its construction business will be the key beneficiary of the government’s rising infrastructure spending. However, valuations are unattractive. At DMC’s current market price of Php10.38/sh, upside to our FV estimate is limited at 3.1%.

   Frances Rolfa Nicolas

CHP disclosed that it has failed to secure the approval of its shareholders for the proposed increase of its authorized capital stock from Php5.2Bil to Php18.3Bil. Only 64.69% of shareholders voted affirmatively, short of the 2/3 required for the said proposal to be approved. Recall that the company intended to raise equity capital, including but not limited to a rights offering. The proceeds were to be used to improve the company’s capital structure, fully fund the ongoing Solid plant expansion, and provide balance sheet flexibility. Despite this development, the company said that it remains committed to pursuing its expansion plan.

   George Ching

SMC has submitted to DOTr a Php10 Bil proposal to redevelop the Pandacal oil depot into a bus and food terminal complex. The complex will divert all provincial buses and delivery trucks away from EDSA to ease traffic in Metro Manila. This would be directly connected to the Skyway expansion project, allowing vehicles and trucks to bypass EDSA.

   Andy dela Cruz

The Big Chill Inc. (TBCI) is planning for its IPO this year and is merely waiting for the infusion of Tullys Coffee Asia Pacific into TBCI before it proceeds with the planned offering. According to management, Tully’s Asia Pacific could be valued at around Php2.0 Bil, doubling the value of TBCI. Proceeds from the IPO would be used to expand TBCI in Asia Pacific where management said it could get partners for franchising.

   Andy dela Cruz

The World Bank has maintained its 6.4% GDP growth forecast for the Philippines in 2019, notwithstanding its global growth projection growth cut to 2.6% from 2.9% this year. World Bank says that private consumption is rebounding amid slowing inflation and improving employment conditions. Furthermore, election-related spending in the first half of 2019 is giving the economy an additional boost and is partly mitigating the impact of weakening exports.

   Andy dela Cruz

Headline inflation increased to 3.2% y/y in May 2019 from 3.0% in the previous month. This is also slightly higher than the 2.9% consensus forecast. Core inflation, which strips out the impact of more volatile food and energy prices, was also higher at 3.5% from 3.4% the previous month. The faster growth of inflation was due to the uptick in food prices such as fish, fruits, and vegetables which were affected by the dry weather conditions. Food prices were partly tempered by the decline in corn and rice prices from year-ago levels. Meanwhile, nonfood inflation also rose due to higher year-on-year inflation of housing, water, electricity, gas, and other fuels.