Alerts

   George Ching

Maintain BUY rating- May 11, 2022 In light of the increase in our earnings forecast for the coal mining business, we are raising our FY22 earnings estimate for SCC by 79.8% to Php42.3Bil. We are also raising our FV estimate on SCC by 20.7% to Php47.8/sh. We are maintaining our BUY rating on SCC. 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 extremely cheap. It is trading at 2.7X 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 11%. Upside to our FV estimate is also very high at 76.4%.

   Justin Richmond Cheng, CFA

May 11, 2022. We are maintaining our HOLD rating on CNPF with an FV estimate of Php22.0/sh. Although we like CNPF for its strong track record of revenue and earnings growth, downside risks to CNPF’s margins and sales persist in the short term. Moreover, at its current price of Php22.20/sh, the stock is already fairly valued.

   George Ching

Maintain HOLD rating- May 6, 2022 We have a HOLD 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. However, at its current price of Php7.87/sh, there is no more upside to our FV estimate.

   George Ching

Maintain HOLD rating- May 6, 2022 After adjusting our revenue and EBITDA estimates, we are raising our FY22 net income forecast by 17.1% to US$570.1Mil. We are also increasing our FV estimate for ICT by 10.5% to Php201.2/sh. Despite this, we are maintaining our HOLD rating on ICT. 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 increased by 62.3% in the past 12 months, outperforming the PSEi’s 9% increase during the same period. Based on its current market price of Php211/sh, ICT is already fairly valued.

   George Ching

May 06, 2022. We have a buy rating on MPI with a FV estimate of Php7.45/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 Php3.82/sh, the company is trading at a 55% discount to its NAV which implies that Maynilad and its toll road business are already worthless. MPI is also trading below its 45.5% stake in Meralco(equivalent to 120% of MPI’s current market capitalization).

   Frances Rolfa Nicolas

May 05, 2022. Accordingly, we are maintaining our FV estimate of Php1.0/sh on CHP. We think that the increasing input costs and intense industry competition would keep the company’s margins muted. Moreover, the company is already operating at near full capacity and thus will have to rely on costly imports in the next couple of years to grow its volumes as mentioned above. As such, we are maintaining our HOLD rating on the stock.

   Justin Richmond Cheng, CFA

Maintain BUY rating- May 2, 2022 We are maintaining our BUY rating on URC with a FV estimate of Php144/sh. We continue to like URC for its market leadership position in several fast-moving consumer goods categories. While the company is facing several cost headwinds, we believe price hikes and structural cost improvements will help mitigate the impact of rising input costs. The company’s scale and vertically integrated operations will also help it perform better compared to its competitors in this high-cost environment. At its current price of Php102.5/sh, URC is trading at 21.6X 2022E P/E, which is below its historical average P/E of 28X. Upside to our reduced FV estimate also remains significant at 39%.

   Richard Lañeda, CFA

May 02, 2022. We are maintaining our BUY rating on AGI following its strong earnings. 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 Php19.5/sh, AGI’s stake is worth Php251.6 Bil. This is equivalent to Php26.58 per share of AGI. If we deduct parent level net debt the value of AGI’s stake in EMP still comes out to Php237.1 Bil, which is 112% higher than AGI’s current market capitalization of Php111.89 Bil. In addition, AGI, through Travellers, MEG, and Golden Arches, is well positioned to benefit from the reopening of the economy.

   Richard Lañeda, CFA

Reiterate BUY. We are maintaining our BUY rating on AGI following its strong earnings. We believe AGI shares are very undervalued.

   Kerwin Malcolm Chan

April 28, 2022. Considering WLCON’s better-than-expected performance in 1Q22, we raised our net income forecast for FY22 and FY23 by 10.2% and 4.7%, respectively. Following these adjustments, we raised our FV estimate by 7.14% to Php24/sh from Php22.4/sh. Despite the earnings upgrade, we maintain our HOLD rating on the stock due to current valuations. Although we like WLCON for its market leadership in the home improvement space, at its current price of Php28.35/sh, the stock is already trading at 35.8x 2022E P/E and above our FV estimate.