Alerts

   Charles William Ang, CFA

We are maintaining our BUY recommendation on GTCAP as we believe that the issues with TMP are temporary and are already priced in. Over the last 12 months, GTCAP has declined by 20%, significantly underperforming the PSEi (-0.2%) over the same period. We remain attracted to GTCAP’s portfolio consisting of companies belonging to industries that benefit from rapid economic growth such as banking, automotive, real estate development, infrastructure, and insurance. Upside potential to our FV estimate is also significant at 26%.

   George Ching

We have a BUY rating on FPH with a FV estimate of Php123.6/.sh. We believe that FPH’s earnings outlook has improved as FGEN has secured the approval of the San Gabriel contract. FPH is also a trading at a huge 43% discount to its market based NAV of Php135.

   Sheila Andanar-Maghari

As previously announced, the change in corporate name of Prime Orion Philippines, Inc. to AyalaLand Logistics Holdings Corp. will be reflected on the Exchange’s systems effective on Monday, May 20, 2019. However, please be advised that the Company’s new stock symbol “ALL” will not be effected on the said date pending the Company’s determination and disclosure of its new stock symbol. Please await for further announcements on this matter.

   Justin Richmond Cheng, CFA

We are reiterating our BUY rating on COSCO with a FV estimate of Php11.0/sh. COSCO remains severely undervalued with the market not pricing in its other businesses (apart from PGOLD) like the liquor distribution and real estate business. Over the last 12 months, COSCO (+7.5% y/y return) has outperformed PGOLD share price performance (-4.8% y/y return). Nevertheless, COSCO is still trading at a steep discount to PGOLD. In fact, even if we only value COSCO for its 49% stake in PGOLD based on the latter’s market value, this still translates to a target price of Php8.5/sh, presenting a 20% upside to COSCO’s current price.

   George Ching

We have a HOLD rating on AEV with a FV estimate of Php47.5/sh. We continue to like AEV given the expansion plans of its power subsidiary AP. AEV is also well positioned to participate in the government’s infrastructure projects owing to its investment in republic cement as well as its strong balance sheet and excellent track record in acquiring businesses. However, we are recommending a HOLD as AEV is currently priced at a premium to the fair value of its subsidiaries. Based on its current market price of Php54/sh, there is no more upside to our FV estimate.

   Richard Lañeda, CFA

We are raising our FV estimate for AC from Php1,070 to Php1,077 as we factored in higher FV estimate for GLO (from Php1,800 to Php1,890), slightly offset by lower FV estimates for MWC (from Php28.10 to Php26.80) and IMI (from Php14.50 to Php10.50). As for AC Energy, we believe the net income decline is not a cause for concern as it was a result of the sell down of their stake in GNPower Mariveles and seasonality effect on the wind farm. Long term potential of AC Energy remains bright on the back of aggressive expansion of its international renewable platforms. We also believe that at the current price of AC, the negative outlook on MWC and IMI have been priced in. At the current price of Php890, AC is trading at a 21% discount to our NAV estimate of Php1,128.

   Frances Rolfa Nicolas

GMA7 has partnered with Singapore Media Exchange (SMX), a joint venture firm established by Singapore Press Holdings and Mediacorp, to expand its audience reach worldwide. Management expects that the partnership would generate synergies that would benefit not only the company but also advertisers in achieving goals in terms of revenue targets, market penetration, and cost efficiency, among others.

   Richard Lañeda, CFA

We maintain our negative outlook on RWM following its disappointing 1Q19 earnings. RWM is now the smallest gaming operator in the Philippines in terms of GGR. We believe the clustering effect in Entertainment City is continuing to have a negative effect on RWM which is isolated in Newport City. With continuous expansion and industry-lagging GGR growth, we believe earnings will remain under pressure from higher costs. We maintain our SELL rating on RWM with a fair value estimate of Php3.44.

   George Ching

We have a BUY rating on SCC with a FV estimate of Php33.20/sh. We believe that much of the negative news is already priced-in, as SCC’s share price has declined by 25.2% in the past 12 months, steeper than the PSEi’s 0.1% drop. The stock is also the cheapest among all power companies, trading at only 7.7X 2019E P/E based on our revised earnings forecast and capital appreciation potential remains significant at 53%, also based on our revised fair value estimate.

   Justin Richmond Cheng, CFA

Maintain HOLD rating. We are maintaining our HOLD rating on CIC with a FV estimate of Php43.0/sh. We continue to like CIC for its strong growth prospects given its market leading position in the air-conditioning business and growing share in the laundry market. However, valuations are no longer attractive with CIC trading at around 15.5X 19E P/E, higher than the regional average of 13.5X. Furthermore, there is no more upside to our FV estimate as CIC is already trading ~4.5% higher than our fair value.