Alerts

   George Ching

May 07, 2024. We have a BUY rating on SCC with a FV estimate of Php52.1/sh. SCC is trading at 5.8X FY24 P/E, below its 10 year historical P/E of 11.6X. Based on its actual 2023 cash dividend of Php7/sh, this provides a very high dividend yield of 22%. Upside to our FV estimate is also very high at 62%.

   Denise Joaquin

May 03, 2024. We are fine-tuning our estimates on RRHI following its first quarter results. In particular, we raised our net income forecast for FY24 to Php9.5Bil to account for the one-time gain resulting from the BPI-RBC merger. Meanwhile, we maintained our FY25 net income forecast of Php6.7Bil. These were driven by our lower revenue forecasts for FY24 (-2.8%) and FY25 (-3.2%) and our higher operating margin assumptions. As a result of the changes in our forecasts, our FV estimate on the stock slightly decreased to Php85.3/sh from Php85.7/sh previously and maintain our BUY rating on the stock. We continue to like the company given its well-diversified portfolio of retail formats in the staples and consumer discretionary categories. We expect recovery this year to be driven by the impact of wage hikes that could alleviate tightened consumer spending.

   George Ching

May 02, 2024. We have a HOLD rating on AEV with a FV estimate of Php60.3/sh. We are maintaining our HOLD rating on AEV. We continue to like AEV given the prospects of its power subsidiary AP. AEV is also well positioned to benefit from the country’s growing infrastructure programs owing to its investment in republic cement as well as its strong balance sheet and excellent track record in acquiring businesses. However, key business units such as Food and Cement continue to be negatively affected the weakness in overall demand, cost inflation as well as elevated interest rates.

   George Ching

May 02, 2024. We have a BUY rating on AP with a FV estimate of Php51.8/sh. We like AP as we believe that it long term earnings growth outlook has improved following the ramp up of its renewable energy capacity expansion initiative. Furthermore, valuation is also cheap, trading at 9.8X FY24 P/E, compared to AP’s 10 year historical P/E of 13.7X. Based on its 2024 cash dividend of Php2.3/sh, this provides a decent dividend yield of 6.2%. The upside to our FV estimate is significant at 39.6%.

   George Ching

April 30, 2024. Maintaining BUY rating. In light of the increase in our earnings forecast, we are raising our FV estimate on MER by 5.8% to Php471.7/sh. We like MER given its predictable and stable cash flow from its power distribution business. We also like MER as its profitability is least vulnerable to the risks facing the power industry (volatility in WESM and commodity prices and unplanned outages) because bulk of its profits come from the distribution business. MER’s is currently trading at 12.4X 2024 P/E, below its 10-year historical average of 17.5X. Based on the actual 2023 cash dividend of Php19.55/sh, this translates to a dividend yield of 5.3%. Based on MER’s current market price of Php367/sh, upside to our FV estimate is significant at 28.5%.

   Denise Joaquin

April 24, 2024. We reiterate our BUY rating on SSI with FV estimate of Php4.60/sh. We expect the company to benefit from resilient consumer spending and the return of foot traffic to physical stores and shopping centers. Despite headwinds from high inflation, we think SSI remains well-positioned to capture the rebound in discretionary spending given its core customer base in the upper-income segment and its portfolio of established and upscale brands.

   Richard Lañeda, CFA

April 23, 2024. We maintain our HOLD rating on VLL with a fair value estimate of Php2.04 given the current high interest rate environment. VLL targets the low-end of the real estate market, and this is the most sensitive to interest rates as most buyers in this segment avail of bank financing.

   Denise Joaquin

April 243, 2024. We reiterate our BUY rating on PGOLD with FV estimate of Php53.1/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 lowincome 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 6.6X 2024E P/E, compared to its 5-year historical average of 12.3X.

   Denise Joaquin

April 18, 2024. We are raising our net income forecasts on CNPF and upgrading our FV estimate on the stock to Php31.0/sh from Php29.6/sh previously in light of the better-thanexpected FY23 results. In particular, we raised our GPM assumptions by 50bps for FY24 and 40bps for FY25 as we expect the company to benefit from lower lock-in costs for major inputs such as tuna. This was partly offset by our higher opex projections and slightly lower top-line estimates. As a result, our net income forecasts increased by 2.0% and 1.7% for FY24 and FY25, respectively. 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 recommend accumulating closer to our new buy below price of Php26.9/sh.

   Denise Joaquin

April 17, 2024. We currently have a BUY rating on PIZZA with a FV estimate of Php11.8/sh. We like PIZZA for its strong top-line growth, driven by expansion efforts for brand portfolio, especially Potato Corner and Peri-Peri. While margins are expected to remain challenged in the near-term due to elevated raw material costs and the ramp up in store expansion, we expect that gradual margin recovery and operating leverage in 2H should support the improvement in profitability.