Alerts

   Charles William Ang, CFA

Maintain BUY- March 6, 2023 We currently have a BUY rating on SECB with a FV estimate of Php141/sh, based on 0.75X 2023E P/BV. We continue to like SECB as we expect it to be one of the major beneficiaries of economic recovery. Looking forwards, we believe that its relatively high capital ratios and liquid balance sheet will allow it to pursue opportunities to grow its intermediation business.

   Richard Lañeda, CFA

March 03, 2023. Maintain BUY with FV estimate of Php10.50. We like BLOOM as the primary gaming play in the Philippines. BLOOM has a marketleading position in mass gaming, supported by the growth in its premium mass segment and slots. Meanwhile, the VIP segment is making remarkable recovery as it does so without much contribution from Mainland Chinese players yet although we should see a recovery in Chinese players this year. We believe our new fair value estimate of Php10.50 is still conservative in that it implies a 2023 EV/EBITDA multiple of 10.8X versus the regional peer median of 20.0X.

   Frances Rolfa Nicolas

March 03, 2023. Maintain BUY rating. We currently have a BUY rating and FV estimate of Php25.5/sh on MWC. We continue to like MWC given its improved outlook brought about by the completion of its recent rate rebasing exercise. Moreover, at its current price, upside to our FV estimate remains significant at 34.2%.

   George Ching

Maintaining BUY rating on SCC- March 1, 2023 In light of the increase in our cost of sales estimates for the coal mining business, we are reducing our FY23E earnings forecast by 7.8% to Php27Bil. We are also lowering our FV estimate of SCC by 5.9% to Php47.3. We are maintaining our BUY rating on SCC. SCC is trading at 4.4X FY23 P/E compared to 12.1X FY23E P/E of domestic peers and its 10 year historical P/E of 11.6X. Based on its actual 2022 cash dividend of Php5/sh, this provides a very high dividend yield of 16.7%. Upside to our FV estimate is also very high at 57.6%.

   George Ching

Maintain BUY rating - March 1, 2023 We have a BUY rating on MER with a FV estimate of Php395.3/sh. We continue to like MER as the power demand is expected to continue to grow this year as the country fully recovers from the impact of the Covid-19 pandemic. Moreover, MER’s valuation is becoming increasingly attractive after the 17% decline from its peak in March of 2022, underperforming the PSEI’s 11% decline from its peak during the same period. MER’s is currently trading at 14.6X 2023 P/E, below its 10-year historical average of 17.5X. Based on MER’s current market price of Php314.8/sh, upside to our FV estimate is significant at 25.6%.

   Richard Lañeda, CFA

Maintain BUY with FV estimates of Php 1,059 - Match 1, 2023 We reiterate our BUY rating on SM given its robust earnings growth despite global headwinds. There is strong momentum in consumer spending which will benefit SM Retail and the malls of SMPH. Meanwhile, banks continue to have strong balance sheets and delivered strong core business growth. Meanwhile, the acquisition of PGPC has proved to be accretive to SM’s bottom line and looks to increase value contribution from its five new geothermal areas.

   Richard Lañeda, CFA

February 22, 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 38.2% from its current price of Php28.95. While earnings growth may face several headwinds including inflation, higher interest rates, 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.

   Richard Lañeda, CFA

February 22, 2023. Maintain BUY with FV estimate of Php40.50. We maintain our BUY rating on SMPH with a fair value estimate of Php40.50. We like SMPH for being the largest mall operator in the Philippines which should benefit from consumption-driven economic growth. With the economy facing high interest rates this year as it continues to tackle inflation, we prefer mall operators over residential developers as defensive plays against high interest rates. We believe consumer spending will be more resilient than residential demand in the face of higher inflation and interest rates.

   Frances Rolfa Nicolas

Downgrading to HOLD- February 16, 2023 In light of the FY22 results, we are reducing our volumes estimate to -2% from 5%, and increasing our ASP growth estimate to 8% from 3% in 2023. We are also lowering our gross margin estimate to 33.0% from 35.8% for the year. These reduced our 2023 net income forecast by 39.6% to Php605Mil. Accordingly, we are lowering our FV estimate to Php0.95/sh on CHP. As mentioned above, we think that weak demand and rising input costs would keep the company’s margins muted this year. Hence, we are downgrading our rating to HOLD on CHP. CHP’s share price has rallied by ~15% following the announcement of the tender offer by CHP’s parent company. Given that the tender offer price of Php1.3/sh is higher than our FV estimate and the current price, we recommend shareholders to tender their shares. Note, however, that assuming the tender offer is oversubscribed, the tender offer will be distributed on a pro rata basis.

   Charles William Ang, CFA

Downgrading to HOLD due to valuations - February 7, 2023 We are downgrading our recommendation on BPI from BUY to HOLD as the recent rally in its share price limits the upside to our FV estimate of Php110/sh, based on 1.40x 2023E P/BV. We like BPI as we expect the bank to see sustained loan growth and net interest margin improvements as the economy recovers and interest rates remain elevated. Furthermore, BPI’s healthy NPL ratio and high NPL cover will allow the bank to be more aggressive in pursuing opportunities to expand its intermediation business. BPI will also benefit from its upcoming merger with Robinsons Bank Corporation (RBC) since this should allow the bank to build new synergies with the Gokongwei group. However, given the limited upside to our FV estimate, we advise accumulating closer to the buy-below price of Php95.00/sh.