Alerts

   Richard Lañeda, CFA

FV estimate reduced to Php8.63 on higher net debt, BUY maintained- July 25, 2022 We adjusted our fair value estimate to account for the higher net debt balance of BLOOM at the end of 2021. Due to losses incurred in 2020 and 2021, BLOOM’s net debt balance increased to Php50.6 Bil from Php27.2 Bil in 2019.. Our fair value is reduced from Php9.90 to Php8.63. We believe our FV estimate is conservative in that it implies a 2023 EV/EBITDA multiple of 9.8X versus the current regional peer average of 12.7X. With still significant upside to our new fair value estimate and lower relative valuation, we maintain our BUY rating on BLOOM.

   Denise Joaquin

Reducing estimates on lower-than-expected sales; maintain BUY rating.- July 21, 2022 After factoring in our adjustments, our FV estimate was reduced by 15.3% to Php8.3/sh from Php9.8/sh. Despite the earnings downgrade, we reiterate our BUY rating on the stock. We continue to like HOME for its sustainable store network expansion plan and initiatives for margin expansion. At its current price of Php4.55/sh, the stock is trading an attractive 11.5x 2022E P/E. Potential capital appreciation relative to our FV estimate is also significant.

   Denise Joaquin

July 1, 2022. Fine-tuning estimates; reiterate BUY rating. We are fine-tuning our estimates to account for the lower-than-expected tax rate and opex booked in the last quarter. After factoring in our adjustments, our FV estimate increased marginally from Php84.4/sh to Php85.3/sh. We reiterate our BUY rating on RRHI given its well-diversified portfolio of retail formats and positive long-term growth prospects.

   George Ching

Maintain BUY rating - July 1, 2022 We are maintaining our earnings forecast for FY22E at Php43.3Bil and 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 109% increase in SCC’s share price in the past 12 months, the stock is still cheap. It is trading at 3.5X 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 8.7%. Upside to our FV estimate is also very high at 38%.

   Kerwin Malcolm Chan

June 21, 2022. We are upgrading our forecasts to account for DNL’s outperformance relative to our estimates in 1Q22. We raised our revenue estimates for FY22 and FY23 by 6.8% and 6.5%, respectively. After factoring in our adjustments, our net income forecasts increased by 8.4% for FY22 and 7.3% for FY23. Should DNL manage to sustain the strong earnings momentum observed during the first quarter, we see profits for the year ending close to record earnings booked in FY18 at Php3.2Bil. As a result, our FV estimate on DNL increased by 4.4% from Php9.1/sh previously to Php9.5/sh. We believe DNL is in a prime position to capitalize on the recovery of the economy given its diversified portfolio of products catering to different consumer groups. DNL remains relatively resilient to rising input costs given its strong pricing power and its portfolio of high margin specialty products. Moreover, the company is a beneficiary of the growing popularity of health, wellness, and sanitation trends brought about by the pandemic.

   April Lynn L. Tan, CFA

Adjusting estimates to factor in latest developments, upgrade to BUY- June 9, 2022 We adjusted our estimates to factor in the weaker than expected first quarter earnings results, the impact of the share buy back, and the tax savings for the rollout of its fiber infrastructure in unserved and underserved municipalities. These adjustments led to a slight reduction in our net income forecast of -2.1% for 2022, and -5.4% for 2023, and a much lower adjustment in our EPS forecast of +0.6% for 2022 and -2.0% for 2023. After factoring in the adjustments in our net income forecast, we reduced our FV estimate slightly from Php29.40/sh to Php28.90/sh. Despite the downgrade, we are upgrading our recommendation to BUY, as the recent selloff in CNVRG shares was too steep. Capital appreciation potential is already attractive at 19.7%. Moreover, the industry remains underpenetrated which should enable the company to maintain its double-digit growth pace in the next few years.

   George Ching

Raising estimates, maintaining HOLD rating- June 6, 2022 Given the changes in our estimates arising from the MER’s “clawback” assumption and higher capex proposal for the 5th RP, we are raising our 5th RP average tariff forecast by 50.6% to Php1.2/kwh. We are also increasing our earnings forecast by 3% to Php26.7Bil for 2022E, and by 6.4% to Php24.3Bil for 2023E. In light of the changes in our forecasts, we are raising our FV estimate by 13.4% to Php377.4/sh, but maintain our HOLD rating.

   George Ching

Juen 6, 2022. Reiterate HOLD rating. The cancellation of the deal slightly reduces our FV estimate for ACEN by 1% to Php5.06/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. At Php7.11/sh, ACEN is trading at 27.8X FY22E P/E, which is significantly above the 17X average 22E P/E of local power companies.

   George Ching

June 6, 2022. Maintaining HOLD rating. Given the changes in our estimates arising from the MER’s “clawback” assumption and higher capex proposal for the 5th RP, we are raising our 5th RP average tariff forecast by 50.6% to Php1.2/kwh. We are also increasing our earnings forecast by 3% to Php26.7Bil for 2022E, and by 6.4% to Php24.3Bil for 2023E. In light of the changes in our forecasts, we are raising our FV estimate by 13.4% to Php377.4/sh, but maintain our HOLD rating.

   Richard Lañeda, CFA

Maintain BUY with FV estimate of Php3.44.- June 3, 2022 The better-than-expected earnings of VLL gives us a reason to be optimistic on VLL. Despite the real estate revenues lagging peers, VLL is making this up through cost saving initiatives. The steady growth of reservation sales is also cause for positivity as this should support future revenues. Lastly, through its community malls, VLL is benefitting from a recovery in consumer consumption as quarantine restrictions are no longer in place. We believe valuations are attractive as our FV estimate of Php3.44 implies a huge 42.2% upside from the current price of Php2.42.