Alerts

   Charles William Ang, CFA

March 28, 2023. Reiterating BUY rating. We are reiterating our buy rating on GTCAP with an FV estimate of Php940/sh. We like GTCAP as it stands to benefit from the continued strength of the local economy. A stabilizing peso should also benefit GTCAP as it allows TMP’s margins to recover. At its current price of Php500/sh, it is trading at just 6X 2023 earnings, significantly below its historical average P/E of 12X. Current discount to NAV also remains near historical high at 53%.

   Carlos Matthew De Leon

March 28, 2023. Raising estimates and reiterating BUY. We are raising FV estimate to Php9.80/sh from Php9.53/sh on higher margin expectations. We increased our FY23E/24E GPM expectations by 1.7/1.4 pps, thereby increasing our earnings forecasts. Although the outlook is not without headwinds, we expect MAXS’ continued focus on cost management to alleviate some of the pressure. At current prices, MAXS is trading at 5.2x 2023E P/E, at a discount it its 11.5x 2Y historical average.

   George Ching

March 28, 2023. We have a BUY rating on MPI with a FV estimate of Php8.79/sh. We believe that investor sentiment should improve with the completion of Maynilad’s rate rebasing exercise as this raises Maynilad’s earnings visibility going forward and eases regulatory concerns. Based on MPI’s current market price of Php3.67/sh, the company is trading at a 61% discount to its NAV which implies that Maynilad and its toll road business are already worthless. MPI is also trading below its 47.5% stake in MER (equivalent to 164% of MPI’s current market capitalization).

   Carlos Matthew De Leon

Reiterate BUY rating - March 24, 2023 Following the disclosure of below-expected results, we reduce our FV estimate to Php22.3/ sh. Our FV estimate went down after we increased our longer-term capex assumptions to factor in the higher-than-expected depreciation. Nevertheless, we maintain our BUY rating on the stock as it is trading at only 6.1x 2023E EV/EBITDA, below its historical average of 9.8x. While full year profits were below expected, revenues recovered as subscriber net additions improved on a q/q basis. Churn also went down for the second quarter in a row which is another positive. Plans to enter the prepaid fiber business would also allow it to tap a larger market, providing it with additional room for growth. However, shares may move sideways in the short-term as macroeconomic headwinds and its disappointing 2022 earnings performance could hurt sentiment for the stock.

   Charles William Ang, CFA

Maintain BUY - March 23, 2023 We currently have a BUY rating on PNB with a FV estimate of Php33.1/sh, based on 0.30X 2023E P/BV. We view PNB as a deep value play since the bank is only trading at 0.17X 2023E P/BV. We expect loan growth to improve as the economy continues to recover and as the bank continues to build up its portfolio.

   Carlos Matthew De Leon

March 23, 2023. Adjusting estimates, maintain BUY rating. Following the 2022 results, we are adjusting our estimates to factor in cost headwinds. We trim our revenue gross profit and operating income profit estimates for 2023E and 2024E. Elevated costs for longer will be the key risk in 2023 should inflation stay sticky. However, we believe JFC’s brand equity provides it with sufficient pricing power to mitigate cost headwinds and cushion its margins moving forward. In light of the forecast revisions, we are maintaining our BUY rating with a lower FV estimate of Php293/sh from Php305/sh. Despite expectations of slowdowns in developed economies, we think JFC’s exposure to emerging markets and the reopening of China should help offset softer demand in North America and Europe. The stock is trading at 29.9x 2023E P/E versus its 5Y historical average of ~35x.

   George Ching

Maintaining HOLD rating - March 15, 2023 We have a HOLD rating on NIKL with a FV estimate of Php8.16. We continue to like NIKL given that prices for nickel will continue to be supported by the ongoing Indonesian nickel ore export ban, while shipment volume is expected to improve from the contribution of the new mines. We also 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, the stock has appreciated by 20.5% in the YTD period, outperforming the PSEi’s 2.6% decline. At its current price of Php7.04/sh, upside to our FV estimate is at 15.9%.

   Richard Lañeda, CFA

BUY with FV estimate of Php 907- March 15, 2023 We maintain our BUY rating on AC as shares are priced quite attractively, with 48% upside to our fair value estimate of Php907.00.

   Richard Lañeda, CFA

March 15, 2023. BUY with FV estimate of Php26.00. 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 five straight quarters of sequential growth. Lastly, RLC has consistently bought back its shares in the open market since approving its Php3 Bil share buyback program, 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 7.8X, which is a deep discount to its long-term average of 12X.

   Denise Joaquin

March 15, 2023. Raising FV estimate to Php163/sh; maintain BUY. We are upgrading our forecasts to factor in URC’s better-than-expected topline performance in FY22 and slightly tempering our short-term margin expectations. Our revenue projections now translate to a 5-year CAGR of 5.3% from 3.8% previously while our EBIT forecasts translate to a 12.2% CAGR from 10.3% previously. As a result of the changes in our forecast, we are raising our FV estimate on URC to Php163/sh from Php154/sh and maintain our BUY rating on the stock. Moving forward, we expect growth to be underpinned by URC’s strong core branded businesses where it has continued to post market share gains in most consumer goods categories (such as snacks, chocolates, and noodles vs. pre pandemic levels) and new product developments (with newly launched products now accounting for ~9% of FY branded revenues). Moreover, we expect bottomline growth to be supported by margin recovery given softer lock-in costs for key inputs such as wheat (-37.9% y/y) and crude palm oil (-45.8%), partly offset by rising prices of coffee (-3.9%) and potato (+47.5%).