Alerts

   Richard Lañeda, CFA

2018 performance for SM jumped by 12.7% driven by the strong performance from SM Retail, SMPH and BDO. This ended in line with both COL and consensus estimates. We remain positive on SM’s fundamentals however given that it’s currently trading near our FV estimate of Php1,010, we are maintaining a HOLD rating. We advise the investors to wait for pullbacks at a more attractive level of Php880 or below before buying.

   George Ching

MPI expects an increase to Php16bil on revenues from NLEX this year. This assumes that the toll rate hike will be granted this year, traffic growth and the opening of the NLEX Harbor Link. Inflation adjusted toll hike increases is expected to be implemented in tranches beginning 2020. We believe that the underperformance of stock prices brought by regulatory concerns is overblown. At this point, valuations are quite attractive. Hence, we maintain a BUY rating for the company with an FV estimate of Php8.01/sh.

   George Ching

JGS reported a fall of 34.7% in their net income for 2018 mainly due to URC, CEB and its petrochemical business’ results. URC missed estimates due to low coffee sales brought by intense competition and deliberate reduction in coffee inventories for December 2018. While CEB trailed behind due to hedging losses. We are maintaining a HOLD rating for JGS as we believe that the company is well positioned to capitalize on the favorable growth outlook of the country’s economy. However, given its current market value, upside is limited from is FV of Php52.15.

   Charles William Ang, CFA

GTCAP’s 4th quarter of 2018 earnings had weaker values than expected which brought most of 2018’s full year figures below COL and consensus estimates. GTCAP’s core income for the full year 2018 declined by 9% as Toyota Motor Philippines’ both wholesale volumes and gross margins continued to decline by 23%. Likewise, MBT had a weak growth of 21% as a result of the jump in provisions. On the other hand, MPI exceeded both COL and consensus forecasts as profits of all major business segments such as, Meralco, toll roads, Maynilad and healthcare were higher and continuing their steady growth. Moving forward, GTCAP expressed confidence that 2019 will be a better year as majority of the drags in 2018 have already been addressed. We will be reviewing our estimates in light of weaker than expected results. We currently have a BUY rating with an FV estimate of Php1,150/sh.

   George Ching

Net income for FPH’s full year 2018 increased 76% as recurring earnings increased 52%, exceeding COL and consensus forecasts. Power subsidiary FGEN and Rockwell Land both delivered better than expected results due to the high performance of FGEN’s gas plants and the rise of Rockwell’s condominium revenues. Lower interest expenses also buoyed the earnings. In light of this, we have a BUY rating with a FV estimate of Php123.6/sh.

   George Ching

Earnings for the full-year 2018 of DMC has declined by 2%, lower than COL and consensus forecast. Mainly due to SCC and Maynilad’s below forecasts earnings which was brought by higher-than-expected costs from the coal mining business and Calaca 1 and 2. However, revenues from DMC’s construction business exceeded forecasts due to lower expenses. We maintain a HOLD rating on DMC with an FV estimate of Php11.43/sh as we believe DMC will benefit from its investment in SCC and its construction business will most likely benefit from the govt’s rising infrastructure business. However, valuations are unattractive.

   Justin Richmond Cheng, CFA

COSCO trailed behind our full year expectations mainly due to PGOLD’s results. The subsidiary reported a drop on their profits from lower supplier support caused by the high inflation rate. Nonetheless, inflation has already subsided. As such, we believe that there will be an improvement in advertising and promotional spending after cutting spending to address the inflation issue. We currently have a BUY rating for COSCO with an FV estimate of Php11.30. However, in light with the weak 4th quarter performance, we will be reviewing our estimates.

   Richard Lañeda, CFA

MEG, EMP, and RWM's higher earnings contribution brought AGI's recurring net profit to grow for the third quarter of 2018. While, Golden Arches reported a 34% decline in earnings due to higher expenses. For the first 9 months of the year, recurring net profit of AGI was up by 9.8%. However, due to the disappointing profit posted by RWM, results ended below both COL and consensus estimates. We are currently maintaining a BUY rating with an FV estimate of Php19.78/sh.

   George Ching

AEV ended in line with our forecast, but narrowed by 13.5% brought by the lower than expected earnings of UBP, Pilmico, and the cement business. We continue to like the company given the expansion plans of its power subsidiary AP. It’s also well positioned to participate in the government’s infrastructure projects. However, at its current price point, there is no more upside to our target price. Hence, we are maintaining a HOLD rating with an FV estimate of Php47.39/sh.

   Charles William Ang, CFA

AC’s full-year 2018 net income was 5.1% higher compared to 2017 ending in line with consensus estimates but slightly below COL estimates. BPI, IMI and AC Motors’ earnings growth were not as appealing but was offset by the growth driven by ALI, GLO, MWC and AC Energy’s earnings which has exceeded our estimates. We currently have a BUY rating on AC with a fair value of Php1,075 as its biggest subsidiaries, ALI, GLO, MWC and AC Energy outperformed.