Alerts

   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.

   Denise Joaquin

February 06, 2023. Maintain BUY rating. We maintain our BUY rating on RRHI with an FV estimate of Php91.4/sh. We continue to like RRHI given its well-diversified portfolio of retail formats and positive long-term growth prospects. We think its recovery initiatives, especially the strengthening of its e-commerce platform, makes RRHI well-positioned to capitalize on future growth opportunities amid increasing digital trends.

   Charles William Ang, CFA

February 02,2023. Maintain HOLD. We currently have a HOLD rating on UBP with an FV estimate of Php71.4/sh, based on 1.00X 2023E P/BV. Moving forward, we expect loan growth to continue amid the recovery of the economy and margins to improve amid elevated interest rates. UBP’s acquisition of Citi’s consumer business should also provide the bank with opportunities to widen its client base and cross-sell its products. Nonetheless, upside potential to our FV estimate remains limited. Additionally, we see the bank’s upcoming inclusion in the PSEi effective February 6, Monday, as an opportunity to take profit on existing positions.

   Frances Rolfa Nicolas

   Frances Rolfa Nicolas

   George Ching

Raising estimates, maintaining BUY rating- January 19, 2023 In light of the increase in our shipment volume forecast, we are increasing our 2023E net income forecast by15.4% to Php12.3Bil, and our 2024E forecast by 20.5% to Php13.2Bil. We are also raising our FV estimate on NIKL by 12.4% to Php8.16/sh. We are maintaining our BUY rating on NIKL. 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. At its current price of Php6.78/sh, upside to our FV estimate is significant at 20.4%.

   George Ching

January 04, 2023. Reiterate HOLD rating. Following the increase in our earnings estimates, we are raising our FV estimate on ACEN by 8.8% to Php6.05/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 ~3,704MW currently, the company is on track to grow its attrib- utable capacity to 5,000MW by FY24, and the capital raised from the recent FOO should help the company achieve this goal. However, valuations are still not attractive at current market price. At Php6.02/sh, ACEN is trading at 18.5X FY24E P/E, which is significantly above the 10.7X average 24E P/E of local power companies

   Carlos Matthew De Leon

A stronger conviction on our BUY rating- December 23, 2022 For the said reasons, we believe that our recently downgraded FV estimate of Php1,760/sh is very conservative, and at TEL’s current price, the capital appreciation potential is significant at 41%. As such, the recent sell-off that was triggered by concerns regarding the details of the capex overrun should be viewed as an opportunity to pick up the stock.

   Carlos Matthew De Leon

December 21, 2022. Upgrading to BUY as sell-off seems overdone. Since the sell-off seems overdone, we are upgrading our recommendation on TEL to BUY from HOLD despite reducing our FV estimate from Php1,910/sh to Php1,760/sh after factoring in the potential impact of the budget overrun. However, we recognize the risk that sentiment for the stock could stay depressed in the short term while the investigation is ongoing due to concerns that more issues could be unraveled. Investors who choose to buy the stock right now should be prepared to withstand volatility.

   Edward K. Lee

December 02, 2022. Revising estimates, maintain BUY rating. Accordingly, we reduce our FV estimate to Php3.5/sh as we temper our estimates and as we rollover our assumptions to 2023. We think that the looming global recession may lead to persisting margin pressures as it will likely negatively impact crude prices and refining margins. This will be partially cushioned as the company benefits from the further easing of restrictions and general increase in mobility. Moreover, despite the cut in our FV estimate, upside potential remains significant at 43%. Hence, we are maintaining our BUY rating on PCOR.