Alerts

   Paolo Miguel Manansala

February 06, 2024. Reiterate BUY rating on MWC amid steady growth and upside risks. We are reiterating our BUY rating in MWC with an FV estimate of Php26.10/sh. We like MWC given its improved regulatory footing, highlighted by the extension of its legislative franchise to 2047 and the successful rate rebasing exercise in 2022. This significantly improves the visibility of earnings growth for MWC until at least 2027. The strong operating performance also allows MWC to give out high dividends going forward. Based on our estimates, MWC’s dividend yield could reach ~6.5% (assuming a 35% dividend payout ratio).

   Charmaine Co

February 05, 2024. Maintain BUY. We currently have a BUY rating on UBP with an FV estimate of Php57.7/sh, based on 1.35x 2024E P/BV ex-goodwill (or 1.00x 2024E P/BV inclusive of goodwill). We expect that UBP will continue to grow its lending business as it continues to unlock value from cross-sell opportunities to newly-acquired Citi clients. As the bank completes the transition of former Citi products and data onto its own platforms, operating expenses should also decrease by an estimate Php2.5-3Bil, providing a boost to net income.

   Charmaine Co

November 30, 2023. We currently have HOLD rating on PCOR with an FV estimate of Php3.50/sh.

   Richard Lañeda, CFA

November 28, 2023. We are lowering our fair value estimate by 4.7% to Php14.10 from Php14.80 as a result of lower income forecast. Nevertheless, 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. Meanwhile, the VIP segment continues to make a remarkable recovery and it does so without contribution from flown-in players from China which used to be the biggest VIP market. We note that 9M23 VIP volume is just 87% of its pre-pandemic level thus we see some upside there. And while 9M23 profit is slightly behind COL forecast, the seasonally stronger 4Q23 could make up for the shortfall.

   Charmaine Co

November 28, 2023. We currently have a buy rating on EW with an FV estimate of Php11.80/sh, based on 0.40x 2023E P/BV. We continue to view EW as a value play, given that the stock is trading at just 0.3x 2023E P/BV (with an estimated ROE of ~10%). At its current price, EW is also a potential dividend play. Assuming it sustains its current payout ratio of 20%, our earnings forecast would translate into a dividend yield of 6.50%. Going forward, we are optimistic on the future of the bank’s lending business as the consumer segment continues to drive loan growth and net interest margin expansion. As the economy reopened, lending and business transactions have also picked up, leading to a recovery in the bank’s fee income closer to pre-pandemic levels.

   Carlos Matthew De Leon

November 23, 2023. We currently have a BUY rating on CNVRG with a FV estimate of Php19.0/sh. At current levels, CNVRG is only trading at .3.7X FY24E EV/EBITDA, lower than its historical averageof ~9X.

   Carlos Matthew De Leon

November 23, 2023. In light of the weaker-than-expected 3Q23, we are reducing our estimates for MAXS, resulting in a lower FV estimate of Php8.30/sh. We trimmed our margin to factor in higher raw material costs and operating expenses, leading to a lower EBIT forecast for FY23E and FY24E. These led to lower net income forecasts for both years. Nevertheless, we are maintaining our BUY rating on MAXS. We believe sales to improve in the near-term as the more favorable seasonality kicks in during the fourth quarter. This should also deliver improved margins thanks to operating leverage benefits. However, key risks to our view include higher-than-expected raw material prices and opex items.

   Denise Joaquin

November 22, 2023. We have a BUY rating on SSI with an FV estimate of Php4.40/sh. We expect the company to benefit from resilient consumer spending and the return of foot traffic to malls. 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.

   Denise Joaquin

November 22, 2023. We are lowering our FV estimate on COSCO to Php12.0/sh as we factor in our lower earnings estimates for PGOLD and the commercial real estate business. Despite the cut in our forecasts, we maintain our BUY rating on COSCO. We think the stock remains severely undervalued, with the market not valuing its other businesses (apart from PGOLD) like the fast-growing liquor business, in our view.

   Carlos Matthew De Leon

November 21, 2023. We have a HOLD rating on JGS with a FV estimate of Php52.8/sh. We like JGS as it is well positioned to capitalize on the favorable long term growth outlook of the Philippine economy given the market leadership position of its operating subsidiaries, the parent company’s strong balance sheet and the excellent track record of its management team. However, it is also sensitive to higher interest rates and rising inflation environment as vulnerable sectors accounted for 60% of NAV.