Alerts

   George Ching

May 10, 2023. We have a BUY rating on FGEN with a FV estimate of Php31.85/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 Php17.60/sh., upside to our FV estimate is at 81%.

   George Ching

May 10, 2023. We have a HOLD rating on JGS with a FV estimate of Php55.7/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 rate and rising inflation environment as vulnerable sectors accounted for 61% of NAV. At its current price of Php49.9/sh, upside to our FV estimate is limited at 11.6%.

   George Ching

May 09, 2023. Maintaining HOLD rating. We have a HOLD rating on ICT with a FV estimate of Php211.9/sh. We are maintaining our HOLD rating on ICT. We continue to like ICT given the 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. Earnings growth will also get a boost the company’s increase in throughput volume as well as its cost reduction initiatives. However, ICT’s share price has appreciated by 5% in the YTD period, outperforming the PSEi’s 0.5% increase during the same period. Based on its current market price of Php210/sh, upside is limited at 1.7%.

   Richard Lañeda, CFA

May 08, 2023. Maintain BUY with FV estimate of Php40.00. We maintain our BUY rating on ALI as our fair value estimate implies a significant upside of 41.6% from its current price of Php28.25. While earnings growth may face several headwinds including inflation, higher interest rates, slow office take-up, and global economic slowdown, 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.

   George Ching

May 05, 2023. Maintaining BUY rating on SCC. In light of the increase in our earnings forecast for the power generation business, we are raising our 2023E earnings forecast for SCC by 27% to Php34.2Bil. We are also increasing our FV estimate on SCC by 9.4% to Php51.74/sh. We have a BUY rating on SCC. We are maintaining our BUY rating on SCC. SCC is trading at 3.5X FY23 P/E compared to 11.1X FY23E P/E of domestic peers and its 10 year historical P/E of 11.6X. Based on its actual 2022 cash dividend of Php3.5/sh, this provides a very high dividend yield of 12.5%. Upside to our FV estimate is also very high at 83%.

   George Ching

May 05, 2023. Reiterate HOLD rating. After factoring in the 600MW Monsoon Wind Project into our estimates we are raising our FV estimate for ACEN by 3.8% to Php6.45/sh. We are maintaining our HOLD rating on ACEN. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewable energy. From ~4,177MW currently, the company aims to increase its capacity by 62% with its 2,500MW of projects under construction which are expected to be completed by 2025. However, valuations are still not attractive at current market price. At Php6.02/sh, ACEN is trading at 18.3X FY23E P/E, which is significantly above the 11X average 23E P/E of local power companies.

   Denise Joaquin

Maintain BUY- May 4, 2023 We currently have a BUY rating on RRHI with an FV estimate of Php91.1/sh. We continue to like RRHI given its well-diversified portfolio of retail formats that stand to benefit from improving mobility trends. Moreover, the strengthening of its e-commerce platform makes RRHI well-positioned to capitalize on future growth opportunities amid increasing digitization in the retail space.

   George Ching

May 03, 2023. Maintaining HOLD rating. In light of the increase in our estimates for AP, we are raising our FV estimate on AEV by 2.7% to Php58/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, based on its current market price of Php56/sh, upside to our FV estimate is limited at 3.6%.

   George Ching

Maintaining BUY rating- May 3, 2023 In light of the increase in our net income forecast, we are raising our FV estimate for AP by 5.5% to Php47.7/sh. We are maintaining our BUY rating on AP. We like AP as we believe that the earnings recovery from 2021 to 2022 can be sustained this year with overall power demand expected to remain strong. Furthermore, valuation is also cheap, trading at 11.7X FY23 P/E, compared to AP’s 10 year historical P/E of 13.7X. Based on its 2023 cash dividend of Php1.87/sh, this provides a decent dividend yield of 4.9%. The upside to our FV estimate is significant at 25.55%.

   Carlos Matthew De Leon

May 02, 2023. Maintaining BUY rating. We maintain our BUY rating on GMA7 with a FV estimate of Php14.7/sh. We continue to like GMA7 given its position to capture ad placement revenues for television and radio given its dominance in the free-to-air space. The company also has a strong financial position which provides flexibility with its strategy. At current prices, upside to our FV is significant at 43%.