Alerts

   George Ching

November 13, 2023. In light of the reduction in our average selling price assumption for nickel, we are lowering our 2023E net income forecast by 27% to Php7.4Bil, and our 2024E net income forecast by 29.3% to Php7.66Bil. We are also reducing our FV estimate on NIKL by 19% to Php6.09/sh. We are downgrading our rating on NIKL to HOLD. We remain positive on the long term outlook for nickel due to the rising EV battery demand. Furthermore, we believe that NIKL’s expansion of its RE power generation business comes at an opportune time given the strong cash flow generation of its nickel mining business, as well as the tightening of power supply in the country. However, we believe that near term outlook for nickel price will continue to be challenging given the slowdown in China’s economic growth. At its current price of Php5.24/sh, upside to our FV estimate is at 16%.

   George Ching

November 13, 2023. We have a BUY rating on DMC with a FV estimate of Php15.2/sh. We are maintaining our BUY rating on DMC. DMC is trading at FY23 P/E of 4X, 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 15.7%. Upside to our FV estimate is also very high at 66%.

   George Ching

November 13, 2023. We have a BUY rating on ACEN with a FV estimate of Php6.45/sh. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewable energy. From ~4,515MW currently, a total of 2,800MW of projects are expected to be completed by 2025. At Php5.19/sh, ACEN is trading at 15.7X FY23E P/E, still above the 11X average FY23E P/E of local power companies, but still reasonable given the faster growth projection of its renewable energy generation portfolio. At Php5.3/sh, upside to our FV estimate of Php6.45/sh is significant at Php24.4%.

   Richard Lañeda, CFA

November 13, 2023. We maintain our BUY rating on RLC as as robust consumer spending should benefit the second biggest mall operator in the Philippines. Meanwhile, RLC maintains a positive outlook on its residential segment, despite interest rates as its net take-up sales have seen eight straight quarters of Y/Y growth. Lastly, RLC has consistently bought back its shares in the open market since approving its Php6 Bil share buyback program and even increased it to Php9 Bil, also confirming our view that shares are undervalued. Our fair value estimate of Php26.00 for RLC is based on a 35% discount to our NAV estimate of Php40.00. Aside from being undervalued compared to our fair values estimate, RLC is also cheap on a relative basis. RLC is currently trading at a FY23 P/E of 6.88X, which is a deep discount to its long-term average of 12X.

   Richard Lañeda, CFA

November 13, 2023. 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 being 53.5% below our fair value estimate. Relative valuation is also attractive as its trades around 4.14X FY23E P/E, 27% discount to the industry median.

   Charmaine Co

November 09, 2023. We currently have a BUY rating on CHIB with a FV estimate of Php40.20/sh, based on 0.70x 2023E P/BV. We expect the bank’s lending business and core fee income to continue driving profitability as the economy recovers from the effects of the pandemic. We also believe that CHIB’s asset quality will remain healthy as businesses continue to operate at higher capacities.

   Denise Joaquin

November 09, 2023. We currently have a BUY rating on DNL with an FV estimate of Php9.3/sh. We continue to like DNL as it remains in a prime position to capitalize on the reopening of the economy. We also expect that the recovery in overall business activity should result in a more favorable sales mix for DNL and drive margin expansion over the long-term. Despite near-term headwinds such as elevated prices and weak consumer sentiment, we believe the company’s long-term growth prospects remain attractive and expect that the significant capacity expansion from its new Batangas facility will allow DNL to scale its export business.

   Denise Joaquin

November 09, 2023. We reiterate our BUY rating on MONDE with an FV estimate of Php10.6/sh. We continue to like the company for its strong core APAC BFB business, where it continues to hold its market leadership position across several consumer food categories (such as noodles, biscuits, oyster sauce, and yogurt drinks). At its current price, upside to our FV estimate is also significant at 30%.

   Carlos Matthew De Leon

November 09, 2023. We have a HOLD rating on ICT with an FV estimate of Php211.9/sh. We are maintaining our HOLD rating on ICT because of the favorable success of its greenfield ports in Australia, Congo and Rio as these ports will be the key earnings growth driver for the company in the next few years. However, ICT’s share price appreciated by 5.3% in the YTD period, outperforming the PSEi’s 6.2% decline during the same period. Based on its current market price of Php209.4/sh, ICT’s upside is limited to 1.65%.

   Richard Lañeda, CFA

November 09, 2023. We maintain our BUY rating on ALI as our fair value estimate implies a significant upside of 372% from its current price of Php29.15. Earnings growth momentum has so far been sustained despite concerns over the impact of higher interest rates on the residential development segment and the recovery in malls has more than offset the lackluster performance of the office leasing segment. We continue to see great value in Ayala Land as they continue to be the biggest developer of estate projects in the Philippines and continue to create value from their landbank through superior master planning of estate projects. ALI’s vast landbank, expertise in value-creating estates, and growing portfolio of office, malls, and hotels, make the company an attractive investment.