Alerts

   John Martin Luciano, CFA

April 28, 2022. Maintain HOLD. We currently have a HOLD rating on BDO with a FV estimate of Php142/sh based on a 1.35X 2022E P/BV. We continue to like BDO as we expect it to be one of the major beneficiaries of the recovery of economic growth with its strong deposit franchise and liquid balance sheet. The outlook for its intermediation has improved as loan growth is expected to rebound on the back of the easing quarantine restrictions and continued economic recovery. Moreover, we expect net interest margin to expand, supported by faster loan growth, rising interest rate environment, and high CASA ratio. However, upside to our FV estimate is no longer attractive. We recommend accumulating near ~Php125/sh.

   George Ching

April 28, 2022. Maintaining HOLD rating. We have a HOLD rating on AEV with a FV estimate of 55.9/sh. We continue to like AEV given the expansion plans of its power subsidiary AP. AEV is also well positioned to benefit from the country’s growing infrastructure programs owing to its investment in republic cement as well as its strong balance sheet and excellent track record in acquiring businesses. However, AEV’s share price has increased by 60.3% in the past 12 months, outperforming the PSEI’s 8% gain. Based on its current market price of Php54.5/sh, there is no more upside to our FV estimate.

   George Ching

Maintain BUY rating- April 28, 2022 We have a BUY rating on AP with a FV estimate of Php41.9/sh. We like AP as we believe that the earnings recovery from the impact of the Covid-19 pandemic in 2021 can be sustained in 2022 with overall power demand expected to exceed pre-pandemic level. Furthermore, valuation is also cheap, trading at 11.6X FY22 P/E, compared to 17X FY22 P/E of domestic peers and AP’s 10 year historical P/E of 13.7X. Based on its 2022 cash dividend of Php1.45/sh, this provides a decent dividend yield of 4.4%. The upside to our FV estimate is significant at 27%.

   Justin Richmond Cheng, CFA

Maintain HOLD rating- April 27, 2022 We currently have a HOLD rating on EMP with a FV estimate of Php14.06/sh. EMP’s international segment has done very well despite the pandemic. We expect the whisky business to continue driving EMP’s long term growth amid its strong and fast-growing brand portfolio, which has grabbed significant share across global markets. Domestic brandy operations have also improved amid the steady reopening of the economy and cost containment efforts. However, the stock is already fairly valued. We recommend for clients to wait for dips near Php12.2/sh before buying the stock.

   Richard Lañeda, CFA

April 26, 2022. Upgrading to BUY with FV of Php6.17. We are upgrading our recommendation on EEI from HOLD to BUY following the recent selloff in the stock. This month alone, EEI’s share price declined 16.2% from Php5.67 to Php4.75. This has made the stock attractively priced now that the upside to our fair value estimate is at 29.9%. We reiterate our favorable view on EEI’s long term prospects given its a) dominant position in the construction industry, b) advantage in winning new projects from the government’s Build, Build, Build program, and c) the company’s healthy construction backlog.

   George Ching

Maintaining HOLD rating- April 26, 2022 We have a HOLD rating on MER with a FV estimate of Php332.9/sh. We continue to like MER as its earnings is set to exceed pre-pandemic level this year as power demand continue to recover with the reopening of the economy . However, MER’s share price is up by 24% in the past 12 months, outperforming the PSEI’s 10% gain. MER’s is currently trading at 16.8X 2022 P/E, close to its 10-year historical average of 17.5X. Based on MER’s current market price of Php342.4/sh, there is no more upside to our FV estimate.

   Justin Richmond Cheng, CFA

April 26, 2022. Maintain BUY rating. Despite reducing our FV estimate to Php142.00/sh, we maintain our BUY rating on URC. We continue to like URC for its market leadership position in several fastmoving 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. Furthermore, the continued reopening of the global economy bodes well for the URC. At its current price of Php109.8/sh, URC is trading at 23X 2022E P/E, which is below its historical average P/E of 28X. Upside to our reduced FV estimate also remains significant at 29%.

   Justin Richmond Cheng, CFA

Reiterate HOLD rating- April 25, 2022 We reiterate 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 Php22.50/sh, the stock is already trading above our FV estimate.

   Frances Rolfa Nicolas

Maintain HOLD rating. _ April 20, 2022 We continue to like GMA7 given its strong financial position and efficient operations. Moreover, the company is in a prime position to capture ad placements for television and radio being the only dominant player in the free to air space. However, the stock is already trading near our FV estimate of Php15.0/sh. As such, we are maintaining our HOLD rating on GMA7.

   George Ching