Alerts

   Richard Lañeda, CFA

BUY rating maintained- August 8, 2022 We maintain our BUY rating on ALI as our reduced fair value estimate still implies a significant upside of 42.1% from its current price of Php25.90. While earnings growth may be negatively affected by the challenges faced by the residential 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.

   Charles William Ang, CFA

August 08, 2022. Maintain BUY. We maintain our BUY rating on MBT with an FV estimate of Php81.5/sh based on 1.10X 2022E P/BV. We continue to like MBT due to its strong and highly liquid balance sheet, substantial low-cost deposits and significantly high capital ratios. The bank’s high CET1 ratio gives it flexibility in giving dividends, while also supporting the bank’s growth objectives as the economy recovers from the pandemic. With its high NPL cover and improving asset quality outlook, MBT has the flexibility to cut down on credit costs going forward. At its current price, the bank is trading at a steep discount versus its peers at 0.6X P/BV (vs BDO’s 1.1X and BPI’s 1.3X) despite being better capitalized and having a higher NPL coverage ratio.

   COL Research Team

August 05, 2022. Reiterate HOLD rating. We maintain our FV estimate of Php8.7/sh on PIZZA as we expect an improvement in sales during 2H22. We expect PIZZA to benefit from the increased spending during the 2H22, the store roll-out, and the full impact of the PC acquisition as it aims to fully recover its top line by year-end. We also see price and menu adjustments as measures to offset increased input costs.

   George Ching

Maintain HOLD rating- August 5, 2022 We have a HOLD rating on ICT with a FV estimate of Php201/sh. We continue 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 from the recovery in global trade and the company’s cost reduction initiatives. However, ICT’s share price has declined by 6% in the YTD period, outperforming the PSEi’s 9% decline during the same period. Based on its current market price of Php187.9/sh, upside is limited at 7%.

   George Ching

August 05, 2022. Maintaining BUY rating on SCC. We are maintaining our BUY rating on SCC with a FV estimate of Php47.8/sh. We like SCC given that we believe that the company is set to post record-high earnings this year due to the increase in coal prices. Despite the 90% increase in SCC’s share price in the YTD period, the stock is still cheap. It is trading at 4.1X FY22 P/E compared to 17X FY22E P/E of domestic peers and its 10 year historical P/E of 11.6X. Based on its actual 2021 cash dividend of Php3/sh, this provides a very high dividend yield of 8.6%. Upside to our FV estimate is at 17%.

   George Ching

Maintain BUY rating- August 5, 2022 We are maintaining our BUY rating on NIKL with a FV estimate of Php7.73/sh. We continue to like NIKL given that prices for nickel will continue to be supported by the ongoing Indonesian nickel ore export ban, as well as the proposal by the Indonesian government to impose a levy on the export of some nickel products. 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. NIKL’s share price has declined by 41% from its peak is March is currently trading at 6.4X 2022E P/E. At the current price of Php5.85, there is a 32% upside to our FV estimate.

   Richard Lañeda, CFA

August 04, 2022. HOLD maintained with FV estimate of Php37.80. We are maintaining our FV estimate of Pph37.80 for SMPH despite the reduction in income as we maintain our positive outlook on the mall business of SMPH. Nevertheless, SMPH remains a HOLD as our fair value estimate is almost at par with the current market price.

   Marvin V. Fausto

August 04, 2022. Reiterate BUY with FV estimate of Php973. We are slightly raising our fair value estimate from Php953 to Php973 to account for the higher-than-expected earnings of SM Retail. We reiterate our BUY rating on SM given its solid fundamentals 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.

   George Ching

August 04, 2022. Maintaining BUY rating on MPI. We have a buy rating on MPI with a FV estimate of Php8.10/sh. We believe that while it is still uncertain how the new concession agreement will impact the outlook and value of Maynilad, investor sentiment on MPI could improve going forward as the new concession agreement will ease uncertainties on Maynilad, as well as concerns on MPI’s other regulated core businesses. Based on MPI’s current market price of Php3.64/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 Meralco(equivalent to 157% of MPI’s current market capitalization).

   Charles William Ang, CFA

Maintain BUY- August 3, 2022 We maintain our BUY rating on CHIB with an FV estimate of Php36.6/sh based on a 0.75X 2022 P/BV. We expect that its lending business and core fee income to continue to expand as economic growth rebounds this year. Moreover, we believe that its asset quality will remain healthy as businesses continue to operate at higher capacities. Expected hikes in BSP policy rates will also lead an opportunity to expand the bank’s net interest margins.