Alerts

   Frances Rolfa Nicolas

Downgrading to HOLD- feb.14, 2022 In light of these, we are slightly reducing our volumes forecast by 3.6% and gross margin forecast by 1.2pp in 2022. Moreover, we are increasing our effective tax rate estimate from 21% to 25%. Furthermore, we are increasing our capex forecast to factor in the higher investment for the Solid Plant expansion. These decreased our 2022 net income forecast by 11.9% to Php931Mil. Accordingly, we are reducing our FV estimate on CHP to Php1.2/sh.

   John Martin Luciano, CFA

February 08, 2022. Maintaining BUY rating. We are maintaining our BUY rating on BPI with a FV estimate of Php112/sh based on a 1.60X 2022E P/BV. We expect BPI to be one of the major beneficiaries of the economic growth after the effect of pandemic eases given its extensive branch network, substantial low-cost deposit (CASA ratio of 77%), and high CET1 ratio (15.8% vs the BSP’s 10.5% minimum). Moreover, the bank has also been front-loading its provisions which should allow the bank to forward quicker once economic growth resumes.

   John Martin Luciano, CFA

February 08, 2022. Maintain HOLD We currently have a HOLD rating on UBP with a FV estimate of Php66.4/sh based on a 1.0X 2022E P/BV (adjusted for goodwill). We expect loan demand to continue recovering given the higher vaccination rate and declining COVID-19 cases. The easing COVID-19 restrictions also bodes well for the outlook on asset quality as more businesses are permitted to resume operations and operate at a higher capacity. However, we believe that valuations are already expensive. At its current price, the bank is already trading at 1.6X, the highest among all the banks.

   John Martin Luciano, CFA

Maintain HOLD- February 8, 2022 We currently have a HOLD rating on UBP with a FV estimate of Php66.4/sh based on a 1.0X 2022E P/BV (adjusted for goodwill). We expect loan demand to continue recovering given the higher vaccination rate and declining COVID-19 cases. The easing COVID-19 restrictions also bodes well for the outlook on asset quality as more businesses are permitted to resume operations and operate at a higher capacity. However, we believe that valuations are already expensive. At its current price, the bank is already trading at 1.6X, the highest among all the banks.

   George Ching

February 08, 2022. Raising estimates, upgrading to BUY. In light of our higher revenue estimates for NIKL’s nickel mining business and after factoring in the earnings from the power generation business, we are increasing our 2022E earnings forecast for NIKL by 17.2% to Php11.4Bil, and our 2023E forecast by 18.1% to Php10.9Bil. We are also raising our FV estimate for NIKL by 16.8% to Php7.80/sh. We are maintaining our BUY rating on NIKL. At its current price of Php6.41/sh, upside to our FV estimate is significant at 21.7%.

   Kerwin Malcolm Chan

January 27, 2022. Realigning estimates to account for Omicron; maintaining HOLD rating. After factoring in these adjustments, we lowered our FV estimate on WLCON by 1.8% to Php24.7/sh from Php25.2/sh. We continue to like WLCON as the market leader in the home improvement space. However, at its current price of Php28.4/sh, WLCON is already trading above our FV estimate and at a 2022E P/E of 39x. Thus, we are maintaining our HOLD rating on the stock and recommend investors to wait for prices to correct before buying.

   John Martin Luciano, CFA

January 25, 2022. Downgrade to HOLD due to valuations We are downgrading our recommendation to HOLD as there is no more upside to our FV estimate of Php9.3/sh. We expect a strong recovery in topline once the spike in cases is under control. In our view, recent restrictions will only be temporary given that the Omicron variant is reportedly milder compared to the Delta variant and the country’s inoculation rate is now higher compared to last year. However, we believe that valuations are already expensive. At its current price, PIZZA is already trading at 30.7X 2022 P/E, a premium to its 5-year average of 22.5X.

   George Ching

January 13, 2022. In light of our higher revenue and earnings estimates, we are raising our FV estimate for NIKL by 8.6% to Php6.68/sh, and upgrading our rating on NIKL to BUY from HOLD. 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. Furthermore, we remain positive on the long term outlook for nickel due to the rising EV battery demand. At its current price of Php5.41/sh, upside to our FV estimate is significant at 23.5%.

   George Ching

Maintaining BUY rating on MPI- January 10, 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 Php3.85/sh, the company is trading at a 61% 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 147% 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 91% to Php7.58/sh.

   Kerwin Malcolm Chan

January 06, 2022. We have a HOLD rating on CNVRG with a FV estimate of Php31.0/sh. Although CNVRG is the fastest growing telco among the three, at Php31.15/sh, the stock is already fairly valued. We recommend investors to wait for pullbacks before buying the stock.