Alerts

   George Ching

Maintaining BUY rating on MPI- March 11, 2022 We have a buy rating on MPI with a FV estimate of Php8.66/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 Php3.69/ sh, the company is trading at a 62% discount to its NAV which implies that Maynilad and its toll road business are already worthless. MPI is trading below its 46% stake in Meralco(equivalent to 154% of MPI’s current market capitalization). Even if we assumed the worst-case scenario where Maynilad would become worthless, capital appreciation potential based on MPI’s current price is still 105% to Php7.58/sh.

   George Ching

Reiterate HOLD rating- March 11, 2022 We have a HOLD rating on ACEN with a FV estimate of Php5.63/sh. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewa- ble energy. From ~3,250MW 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 Php7.79/sh, ACEN is trading at 32X FY22E P/E, which is significantly above the 17X average 22E P/E of local power companies.

   Richard Lañeda, CFA

March 11, 2022. Reiterate BUY with FV estimate of Php4.54. We maintain our BUY rating on MEG as we view the compnay to be a beneficiary of the reopening of the economy. Though MEG’s mall business is relatively smaller than that of SMPH and RLC, a recovery in the mall business would still be positive for MEG. We could also see an improvement in real estate sales as buyers gain more confidence on a sus- tained economic recovery. Our fair value esimate also implies significant upside of 46.5% from its current market price of Php3.10.

   John Martin Luciano, CFA

March 10, 2022. In light of the minimal change in our earnings forecasts, we are maintaining our BUY rating with a FV estimate of Php168/sh based on a 1.60X 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. Overall, outlook for its intermediation has improved as loan growth is expected to continue recovering following the increasing vaccination rate and declining COVID-19 cases. Moreover, net interest margin is also expected to increase amid the rising interest rate environment and improving asset mix.

   John Martin Luciano, CFA

March 10, 2022. In light of the minimal change in our forecast, we reiterate our BUY rating on MBT with an FV estimate of Php98/sh based on 1.30X 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. The high capital ratio will also support the bank’s growth objectives in the near-term as the economy recovers from the pandemic. Meanwhile, the bank’s high NPL cover as well as improving asset quality outlook gives the bank flexibility to trim credit cost in 2022. At its current price, the bank is trading at a steep discount vs its peers at 0.78X 2022E P/BV (vs BDO’s 1.25X and BPI’s 1.40X) despite being better capitalized and having a higher NPL cover ratio.

   George Ching

Reiterate BUY rating on DMC- March 10, 2022 We have a BUY rating on DMC with a FV estimate of Php12.4/sh. We like DMC given that we believe that earnings have bottomed out in 2020(with 9M21 earnings increasing by 164% y/y following a 47% decline in 2020 due to the impact of the Covid-19 pandemic). DMC’s stock price has risen by 75% in the past 12 months, outperforming the PSEI’s 3.3% advance. DMC is trading at 2022E P/E of 4.8X, 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 10.4%. Upside to our FV estimate is also very high at 34.5%.

   Richard Lañeda, CFA

March 10, 2022. Maintain BUY with FV estimate of Php10.70. We maintain our BUY rating on BLOOM as we see it as a major beneficiary of lower alert levels in the country. We expect growth to be primarily driven by the local market there is little visibility on how and when the VIP market, primarily China, will recovery back to pre-pandemic levels. We have a fair value estimate of Php10.70 for BLOOM.

   Richard Lañeda, CFA

March 10, 2022. BUY with FV estimate of Php26.90. We maintain our BUY rating on RLC as believe RLC has the potential to outperform the index given that its shares are currently very undervalued based on our estimates. Moreover, being one of the most hurt by the pandemic, RLC 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, but the residential business as well, as this would translate to improved consumer sentiment and investor confidence.

   Frances Rolfa Nicolas

March 09, 2022. Maintain HOLD rating. We currently have a HOLD rating and FV estimate of Php27.0/sh on MWC. In light of the weaker-than-expected FY21 results, we will be reviewing our estimates on the company. Moreover, we await for the details of the East Zone’s revised concession agreement and the next round of rate rebasing, which should take effect in 2023, as these will determine the outlook of the company.

   Justin Richmond Cheng, CFA

March 04, 2022. Maintain BUY rating. We currently have a BUY rating on RRHI with an FV estimate of Php100/sh. We continue to like RRHI given its well-diversified portfolio of retail formats and positive long-term growth prospects. We think its recovery initiatives, especially the strengthening of its e-commerce platform, makes RRHI well-positioned to capitalize on future growth opportunities amid increasing digital trends.