Alerts

   Richard Lañeda, CFA

May 10, 2024. We maintain our BUY rating on MEG given its robust residential segment and recovering malls and hotels. Its office segment remains a steady source of income and a strong anchor of the company’s value. Shares of MEG are attractively valued, it is trading 60% below our fair value estimate.

   Paolo Miguel Manansala

May 10, 2024. We have a HOLD rating on ICT with an FV estimate of Php221/sh. We are maintaining our HOLD rating on ICT because of the favorable success of its greenfield ports in Australia, Congo and Rio as well as its continued expansion throughout various regions. However, ICT has limited upside amid the share price appreciating by 35.6% YTD.

   Denise Joaquin

May 10, 2024. While we continue to like CNPF for its strong brand equity, stable track record of sales and earnings growth, and long-term prospects for its emerging categories, we maintain our HOLD rating on the stock due to current valuations. We believe the stock is already fairly valued as it is trading above our FV estimate of Php31.0/sh. We recommend accumulating closer to our buy below level of Php26.9/sh.

   Denise Joaquin

May 09, 2024. We are fine-tuning our estimates on URC following its first quarter results. In particular, we slightly lowered our net income forecast for FY24 by 0.5% andFY25 by 1.1%. This was driven by our higher tax and finance cost assumptions, which offset our higher operating margins forecasts. As a result of the changes in our forecasts, our FV estimate on URC marginally decreased to Php148/sh from Php150/sh previously. We maintain our BUY rating on the stock since we continue to like URC for its strong core branded businesses. At current prices, we estimate that URC is trading at 16.4X 2024E P/E, below its 5-year historical average of 24.0X. Upside potential relative to our FV estimate is also significant at 35.2%.

   Richard Lañeda, CFA

May 09, 2024. We maintain our BUY rating on ALI with a fair value estimate of Php40.50. Residential revenues have improved since 4Q23 and looks to be sustainable. Meanwhile, take-up sales were robust in 1Q24 despite the high interest rate environment as interest rate cuts have been elusive owing to stubborn US inflation. ALI seems to be the least affected by higher interest rates as their more affluent buyers are the least dependent on bank loans. Meanwhile, the malls segment remains robust, and the office leasing segment continues to improve despite a difficult operating environment. Overall, we how ALI has performed during this challenging period and will be the main beneficiary once interest rates ease.

   Richard Lañeda, CFA

May 09, 2024. We are reducing our net income forecast for 2024 and 2025 as we temper our forecast for SM Retail following two straight quarters of Y/Y decline. Management also acknowledged that consumer spending behavior has changed and are spending less on discretionary items. We lower our 2024 and 2025 net income forecast by 1.1% and 3.3% respectively to Php83.76 Bil and Php88.15 Bil respectively following the lower SM Retail forecast. We also applied a 10% discount to NAV to reflect a wider discount the market is pricing in on SM’s asset value. Our new fair value estimate is Php994.00. Given that the upside from the current price to our fair value estimate is limited to 10.8%, we are downgrading our recommendation from BUY to HOLD.

   Richard Lañeda, CFA

May 09, 2024. We maintain our BUY rating on SMPH with a fair value estimate of Php43.20. We maintain our BUY rating on SMPH for its dominance in the mall segment, which has capitalized on the strength of the consumer sector. The mall segment has so far been very resilient in the face of higher interest rates and high inflation. Meanwhile, SMPH’s residential revenues are holding up well despite lower reservation sales since 3Q23. Nevertheless, we are keeping an eye on this space given the lower take up sales and high interest rates.

   George Ching

May 09, 2024. We have a BUY rating on ACEN with a FV estimate of Php5.80/sh. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewable energy. From ~4,852MW currently, a total of 1,900MW of projects are expected to be completed by 2025. At Php4.18/sh, ACEN is trading at 14.5X FY24E P/E. Upside to our FV estimate of Php5.80/sh is significant at 39%.

   George Ching

May 09, 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 Php18.8/sh., upside to our FV estimate is at 67.4%.

   George Ching

May 09, 2024. We have a BUY rating on DMC with a FV estimate of Php15.4/sh. We are maintaining our BUY rating on DMC. DMC is trading at FY24 P/E of 5.5X, below its historical P/E of 11.2X. Based on its actual 2023 cash dividend of Php1.44/sh, this provides a very high dividend yield of 13.2%. Upside to our FV estimate is also very high at 41%.