Alerts

   Justin Richmond Cheng, CFA

June 02, 2022. Reiterate HOLD rating. We currently have a HOLD rating on EMP with an FV estimate of Php14.06/sh. We continue to like EMP for its resilient international segment and robust whisky business. Moreover, its domestic brandy operations have improved amid the steady reopening of the economy and cost containment efforts. However, at its current price of Php18.48/ sh, the stock is already fairly valued. We recommend for investors to wait for pullbacks before buying the stock.

   Justin Richmond Cheng, CFA

Reiterate BUY rating- June 2, 2022 We currently have a BUY rating on COSCO with an FV estimate of Php11.9/sh. COSCO remains severely undervalued with the market not valuing its other businesses (apart from PGOLD) like the liquor distribution and real estate business, in our view.

   Justin Richmond Cheng, CFA

Maintain BUY rating- June 1, 2022 We currently have a BUY rating on PGOLD with an FV estimate of Php52.8/sh. We continue to like PGOLD as it remains well-positioned to capture growth opportunities in the retail sector for its differentiated focus of middle to low-income class consumers as well as the niche market of resellers. Furthermore, the company’s aggressive store network expansion plan boost its long-term prospects in underserved areas, which remain an attractive market for PGOLD. At its current price of Php33.33/sh, the stock is trading at a 9.8x 2022E P/E and upside to our FV is significant at 58.6%.

   Richard Lañeda, CFA

June 01, 2022. Maintain BUY. We are maintaining our BUY rating on AGI despite 1Q22 slightly lagging estimates. We believe AGI shares are very undervalued. AGI’s stake in EMP is already worth more than AGI’s market cap. At EMP’s current price of Php18.20/sh, AGI’s stake is worth Php240.6 Bil. This is equivalent to Php23.80 per share of AGI. If we deduct parent level net debt the value of AGI’s stake in EMP still comes out to Php230.7 Bil, which is 123.6% higher than AGI’s current market capitalization of Php103.17 Bil. In addition, AGI, through Travellers, MEG, and Golden Arches, is well positioned to benefit from the reopening of the economy.

   Justin Richmond Cheng, CFA

Reducing estimates on lower gross margins; maintaining BUY rating- May 27, 2022 Considering CIC’s lower-than-expected 1Q22 earnings, we lowered our FV estimate by 5.7% from Php27.9/sh to Php26.3/sh. Despite the earnings cut, we are maintaining our BUY rating on the stock. We continue to like CIC for its positive long-term growth prospects and market leadership in the air conditioning and refrigerator markets. At its current price of Php18.0/sh, upside to our FV estimate is also significant at 46.1%.

   John Martin Luciano, CFA

May 26, 2022. We currently have a BUY rating on SECB with a FV estimate to Php172/sh based on 1.00X 2022E P/BV. We continue to like SECB as we expect it to be one of the major beneficiaries of the recovery of economic growth, especially with its high CET1 ratio of 19.5%. Going forward, we believe that its intermediation business and asset quality will improve amidst the looser quarantine restrictions.

   John Martin Luciano, CFA

Maintain BUY- May 26, 2022 We are downgrading our FV estimate to Php12.6/sh based on a 0.45X 2022E P/BV. However, we are maintaining our BUY rating primarily on valuations. We remain cautious over EW’s large exposure in credit cards and auto loans, which represent a total of 50% of its loan portfolio. Note that its asset quality and lending operations were one of the most severely impacted among all banks. Nevertheless, we expect these to slowly improve as the economy gradually recovers amidst the easing quarantine restrictions.

   John Martin Luciano, CFA

May 26. 2022. We currently have a BUY rating on MAXS with a FV estimate of Php8.45/ sh. We expect a strong recovery in dine-in sales as Metro Manila and other areas were already placed under Alert Level 1. This already allows 100% capacity for dining which bodes well for Max’s and Pancake House, which are more dine-in-dependent compared to its other brands. The improvement in sales should help offset the pressure of higher input cost amid the surge in commodity prices given the impact of operating leverage.

   John Martin Luciano, CFA

Maintain HOLD.- May 25, 2022 We reiterate our HOLD rating on JFC with a FV estimate of Php213/sh. We expect strong domestic sales recovery going forward amid the relaxation of quarantine restrictions and higher consumer spending because of the elections. Meanwhile, COVID-19 cases seem to have peaked globally in January which bodes well for restrictions going forward. On the other hand, the impact of rising input cost will be partly mitigated by higher selling prices and improving scale in its international segment. We believe that pullbacks are opportunities to buy the stock.

   John Martin Luciano, CFA

May 24, 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 its lending business and fee-based revenues to pick up as economic growth rebounds this year. Note that COVID-19 restrictions are at an all-time low after the government placed Metro Manila and other areas under Alert Level 1 last March. This bodes well for the outlook in asset quality and credit cost as businesses are permitted to operate at higher capacities.