Alerts

   Justin Richmond Cheng, CFA

Maintain BUY rating - March 28, 2022 Despite the reduction in our earnings forecast and FV estimate to Php16.60/sh, we are maintaining our BUY rating on MONDE. We like MONDE because of its market leading position in several branded consumer food products. The company also offers a unique exposure to the alternative meat market which has an attractive growth prospect. Note that MONDE is currently suffering from short-term headwinds including weak demand for meat alternative products and rising commodity prices.

   Frances Rolfa Nicolas

Maintain BUY rating- March 23, 2022 Accordingly, we are reducing our FV estimate to Php17.5/sh on EAGLE. We remain optimistic on the construction industry’s recovery and consequently the improvement in cement demand this year. We continue to like EAGLE because of its strong balance sheet position, excess capacity, and superior margins compared to its peers. At its current price, upside to our FV estimate is significant at 29%. Hence, we are maintaining our BUY rating on EAGLE.

   Kerwin Malcolm Chan

March 18, 2022. We continue to like CNVRG given the company’s attractive growth prospects being a pure play on the fast-growing underpenetrated fixed broadband industry in the Philippines. The company also has a strong balance sheet and a large growing operating cash flow.

   John Martin Luciano, CFA

Reducing estimates; Maintain BUY- March 16, 2022 Following the changes in our forecasts, we are downgrading our FV estimate to Php206/sh based on 1.20X 2022E P/BV. However, we are maintaining our BUY rating as the upside to our target remains attractive. 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 will improve as loan growth should recover amidst easing quarantine restrictions, increasing vaccination rate, and declining COVID-19 cases. More importantly, asset quality should improve as businesses are gradually allowed to operate at higher capacities.

   John Martin Luciano, CFA

March 16, 2022. We maintain our BUY rating on CHIB with a FV estimate to Php43/sh based on a 0.90X 2022 P/BV. We expect its lending business and fee-based revenues to pick up as economic growth rebounds. This will be supported by increasing vaccination rates, easing mobility restrictions, and declining COVID-19 cases. In addition, we continue to like the bank’s low exposure to consumer loans at 20% of total loans, bulk of which are mortgage loans. Recall that we view auto, credit cards, and SME segments to be the most at risk in asset quality during this pandemic.

   Kerwin Malcolm Chan

Upgrading to BUY rating- March 15, 2022 We are upgrading our recommendation on CNVRG to a BUY rating with a fair value estimate of Php31.0/sh. After rising to a peak of Php45.4/sh, the stock suffered from a correction and is now trading at a very attractive valuation. At its current price of Php21.7/sh, capital appreciation potential is attractive at 42.9%. We continue to like CNVRG given the company’s attractive growth prospects being a pure play on the fast-growing underpenetrated fixed broadband industry in the Philippines. The company also has a strong balance sheet and a large and growing operating cash flow.

   Richard Lañeda, CFA

March 15, 2022. FV raised to Php1,005. Our fair value estimate for AC is raised to Php1,005 from Php962 after factoring in the higher fair value estimate for ALI (from Php43.20 to Php47.40). We raised our fair value estimate for ALI after factoring in higher land prices. We maintain our BUY rating on AC as we see the company being one of the major beneficiaries of the reopening of the economy and therefore, we see upside risk in both earnings and fair value estimates.

   George Ching

Maintaining HOLD rating- March 15, 2022 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 41% in the past 12 months, outperforming the PSEI’s 3.3% gain. Based on its current market price of Php58.7/sh, there is no more upside to our FV estimate.

   George Ching

March 11, 2022. Raising estimates, maintaining HOLD rating. In light of our higher LME price estimates, we are increasing our FY22 net income forecast by 9.9% to Php12.6Bil. We are also raising our FV estimate for NIKL by 7% to Php8.36. We are maintaining our HOLD rating for NIKL. 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 Php8.43/sh, there is no more upside to our FV estimate.

   George Ching

Maintaining BUY rating- March 11, 2022 We have a BUY rating on AP with a FV estimate of Php46.5/sh. We like AP as we believe that the company’s earnings have already bottomed out (with FY21 earnings increasing by 68% y/y out following a 24.6% decline in 2020 due to the impact of the Covid-19 pandemic). Furthermore, valuation is also very cheap, trading at 12.5X 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 projected cash dividend of Php1.45/sh, this provides a decent dividend yield of 4.2%. The upside to our FV estimate is very high at 34.8%.