Alerts

   Paolo Miguel Manansala

May 22, 2024. We currently have a BUY rating on TEL with an FV estimate of Php1,720/sh. At its current price, capital appreciation potential remains attractive at 27.4%. Furthermore, we like TEL for its leadership in the fixed line and enterprise segments as well as its consistent dividend policy. At its current price, dividend yield is very attractive at 6.6%.

   Paolo Miguel Manansala

May 22, 2024. We reiterate our BUY rating and FV estimate of Php19.20/sh on CNVRG. We are pleased to see the substantial increase in CNVRG’s net additions amid lower churn rates in the first quarter and hope that this will be sustainable going forward. Valuations are also attractive. At CNVRG’s current price, capital appreciation potential is attractive at 91.8%.

   Richard Lañeda, CFA

May 22, 2024. HOLD with FV estimate to Php0.92. HOLD with FV estimate to Php0.92 We maintain our HOLD rating and FV estimate of Php0.92 on FLI given the challenging operating environment of both residential and office leasing sector. Demand for residential projects is expected to be pressured by higher interest rates and risks on economic growth. Meanwhile, FLI continues to underperform in the office leasing segment with a higher-than-industry vacancy rate because of its previous exposure to the POGO segment. While economic activity has improved, the hybrid work-from-home set-ups has reduced overall demand for office space, making it harder to FLI to increase occupancy rate of its offices.

   George Ching

May 22, 2024.We have a BUY rating on FGEN with a FV estimate of Php31.50/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 Php17.9/sh., upside to our FV estimate is at 76%.

   Richard Lañeda, CFA

May 21, 2024. Reducing fair value estimate to Php14.36. We are reducing our fair value estimate for AGI to Php14.36 as we factor in the lower FV estimate for MEG (from Php4.36 to Php3.47). We also increased the holding company discount we used to 45% from 25% to reflect the lack of a compelling reason to invest in AGI given that MEG and EMI, its two largest subsidiaries, are listed, while Travellers continues to find it difficult to improve profitability. Nevertheless, given the significant upside to our reduced fair value, we maintain our BUY rating.

   Richard Lañeda, CFA

May 21, 2024. Reducing FV estimate to Php3.47. We are reducing our fair value estimate for MEG from Php4.36 to Php3.47 as we factor in the increase in the number of shares resulting from AGI’s subscription. We are also increasing our target discount to NAV from 35% to 45% given the lack of transparency for issuance of shares which are already trading at a deep discount to NAV. We are also concerned that MEG and AGI are making moves that are not in the best interest of the minority shareholders. Nevertheless, given the still-significant upside to our reduced FV estimate, a BUY rating is maintained.

   Charmaine Co

May 21, 2024. We are maintaining our BUY rating on PNB with a new FV estimate of Php37.6/sh, based on 0.30x 2024E P/B (previously Php35.4/sh, based on 0.30x 2024E P/B). We continue to view PNB as a deep value play, given that it is only trading at 0.2x 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 lowcost deposit base. The bank is also pushing forward with endeavors to improve profitability by reducing low-earning assets and trimming down non-performing loans.

   Denise Joaquin

May 21, 2024. Reiterate BUY rating. We reiterate our BUY rating on PGOLD with FV estimate of Php53.4/sh. We continue to like PGOLD as it remains well-positioned to capture the recovery of consumer spending despite near term inflationary headwinds. We also like PGOLD for its differentiated focus, which enables it to capture middle to low income class consumers through Puregold while it competes in the premium segment through S&R. Moreover, we see medium-term growth being supported by PGOLD’s continued store network expansion initiatives as it ramps up new store openings for its two retail brands. Nonetheless, we see the slower-than-expected recovery of consumer spending and stronger-than-expected competition in the retail space being key risks to the sector. Valuations for PGOLD are attractive at 6.9X 2024E P/E, compared to its 5-year historical average of 12.3X.

   Charles William Ang, CFA

May 17, 2024. We currently have a BUY rating on GTCAP with an FV estimate of Php955/sh. We continue to like GTCAP as its portfolio of assets (banking, automotive, property, infrastructure, etc.) allows it to participate in the continued growth of the country. At its current price of Php635/sh, it is trading at just 5.1X 2024 earnings. Despite GTCAP’s recent outperformance, discount to NAV also remains high at 47%.

   Richard Lañeda, CFA

May 16, 2024. We have a BUY rating on BLOOM with a FV estimate of Php15.30. We continue to like BLOOM as a bottom-up pick as it is the primary gaming play in the Philippines. BLOOM has a market-leading position in mass gaming, supported by the growth in its premium mass segment and slots. Apart from continued growth in Entertainment City, BLOOM looks to grow its gaming market share (particularly the mass segment) this year with the opening of Solaire Resort North. We note that we have not yet factored in Solaire Resort North into our estimates and fair value.