Alerts

   George Ching

maintain BUY rating on DMC- May 13, 2022 We have a BUY rating on DMC with a FV estimate of Php12.95/sh. We are maintaining our BUY rating on DMC. DMC is trading at 2022E P/E of 2.7X, below its historical P/E of 11.2X. Based on its actual 2021 cash dividend of Php0.96/sh, this provides a very high dividend yield of 11.7%. Upside to our FV estimate is also very high at 58%.

   George Ching

May 13, 2022. Maintaining HOLD rating. We have a HOLD rating on JGS with a FV estimate of Php53.4/sh. We like JGS as it is well positioned to capitalize on the favorable long term growth outlook of the Philippine economy given the market leadership position of its operating subsidiaries, the parent company’s strong balance sheet and the excellent track record of its management team. However, it is also sensitive to the ongoing COVID-19 pandemic as well as concerns of rising inflation as vulnerable sectors accounted for 61% of NAV. Moreover, at its current prices of Php52/sh, upside to our FV estimate is limited at 2.7%.

   Richard Lañeda, CFA

May 12, 2022. We are upgrading our recommendation on SM from HOLD to BUY as the recent retreat in SM’s share price has increased the upside to our fair value estimate of Php953 to 15%. More importantly, are positive about the recovery in malls and retail as the worst of the pandemic is likely behind us. Meanwhile, banks are likely to benefit from higher loan growth as economic activity improves and higher margins due to the rising interest rate environment.

   Richard Lañeda, CFA

May 12, 2022. BUY with FV estimate of Php25.60. We maintain our BUY rating on RLC as it will also be a major beneficiary of the ongoing recovery. Greater mobility arising from lower alert level will not only benefit RLC’s mall business and hotels, but the residential business as well, as this would translate to improved consumer sentiment and investor confidence. Meanwhile, its growing office portfolio gives it a steady source of recurring income to minimize earnings volatility.

   George Ching

May 12, 2022. We have a HOLD rating on ACEN with a FV estimate of Php5.11/sh. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renew- able energy. From ~3784MW currently, the company is on track to grow its attributable capacity to 5,000MW by FY24, and the capital raised from the recent FOO should help the company achieve this goal. However, valuations are no longer attractive as the positives are priced in. At Php6.92/sh, ACEN is trading at 28.6X FY22E P/E, which is significantly above the 17X average 22E P/E of local power companies.

   Kerwin Malcolm Chan

May 12, 2022. After factoring in the lower-than-expected 1Q22 earnings, we are reducing our gross margin forecasts by 60bps for FY22 and 20bps for FY23. We also tempered our topline estimates slightly following the underperformance. After factoring in our adjustments, our net income forecast for FY22 and FY23 fell by 42.4% and 12.1%, respectively. Following these adjustments, we lowered our FV estimate by 4.7% to Php8.20/sh from Php8.6/sh. Despite the earnings cut, we maintain our BUY rating on the stock. We continue to like the company for its long-term recovery prospects and opportunities to capitalize on the fast-growing EV and renewable energy space. At its current price of Php7.12/sh, capital appreciation potential is also attractive at 15.17%.

   Richard Lañeda, CFA

May 12, 2022. We have a positive outlook on SMPH as it will be a major beneficiary of further relaxation of quarantine restrictions as the threat of the pandemic eases. The improving situation will not only lead to better tenant sales but will also allow SMPH to reduce discounts given to tenants on their fixed rent. We maintain our HOLD rating in SMPH despite the positive outlook given the upside to our fair value of Php37.80 estimate remains limited to 10%.

   April Lynn L. Tan, CFA

May 11, 2022. We reiterate our HOLD rating on TEL with an FV estimate of Php1,840/sh. We continue to like TEL due to its market leadership in the underpenetrated fixed broadband segment and its fast-growing enterprise segment. However, at its current price of Php1,848/sh, the stock is already fairly valued.

   John Martin Luciano, CFA

Maintain BUY- May 11, 2022 In light of the minimal change in our earnings forecasts, we are maintaining 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 on the back of its strong and highly liquid balance sheet, substantial low-cost deposit, and significantly high capital ratios. The bank’s high CET1 ratio gives the bank flexibility in giving dividends, while also supporting the bank’s growth objectives the economy recovers from the pandemic. The bank’s high NPL cover and improving asset quality outlook give the bank flexibility to trim credit cost in 2022. At its current price, the bank is trading at a steep discount versus its peers at 0.7X 2022E P/BV (vs BDO’s 1.2X and BPI’s 1.4X) despite being better capitalized and having a higher NPL cover ratio.

   Justin Richmond Cheng, CFA

May 11, 2022. We are maintaining our BUY rating on DNL with a FV estimate of Php9.1/sh. We like DNL since it is in prime position to capitalize on the recovery of the economy given its diversified portfolio of products catering to different consumer groups. The company is relatively resilient to rising input costs given its strong pricing power and its portfolio of high margin specialty products. DNL is also a beneficiary of the growing popularity of health, wellness, and sanitation trends brought about by the pandemic.