Alerts

   John Martin Luciano, CFA

November 19, 2021. Maintain BUY. We are maintaining our BUY rating on SECB with a FV estimate of Php213/sh based on 1.20X 2022E P/BV. 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

November 18, 2021. Maintain HOLD. We are maintaining our HOLD rating on JFC with a FV estimate of Php220/sh. We expect sales to further recover in the fourth quarter after the government recently announced that Metro Manila will be placed under a more relaxed Alert Level 2 amidst declining COVID-19 cases and increasing vaccination rate. This now allows dine- in operations at 50% capacity for fully vaccinated individuals and outdoor dining at 70% capacity regardless of vaccination status. Moreover, we expect consumer confidence and business confidence to improve which should boost spending. Nevertheless, valuation is already expensive. At its current price, JFC is already trading at 43.3X 2022E P/E, above its 10-year historical median P/E of 36.5X.

   Justin Richmond Cheng, CFA

November 18, 2021. Maintain BUY rating. We currently have a BUY rating on COSCO with a FV estimate of Php14.1/sh. Our FV estimate already factors in COSCO’s revised ownership in the liquor distribution business (78% ownership from 98%) after the latter’s follow-on-offering. COSCO remains severely undervalued with the market not valuing its other businesses (apart from PGOLD) like the liquor distribution and real estate business. In fact, if we only value COSCO (adjusting for parent net debt) for its 49% stake in PGOLD based on the latter’s market value, this still translates to a target price of Php9.7/sh.

   Justin Richmond Cheng, CFA

November 18, 2021 - Maintain BUY rating We currently have a BUY rating on SSI with a FV estimate of Php3.65/sh. While SSI’s 9M21 earnings remain challenged amid the COVID-19 pandemic, we believe this is already priced in by the market. Furthermore, the challenging earnings situation is only expected to be temporary, and sales are already gradually returning to pre-pandemic levels amid the steady easing of quarantine restrictions.

   Frances Rolfa Nicolas

November 18, 2021- Maintain HOLD Rating 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, at its current price, upside potential to our FV estimate of Php16.8/sh is limited. As such, we are maintaining our HOLD rating on GMA7.

   George Ching

November 18, 2021. Maintaining our BUY rating on FPH. We have a BUY rating on FPH with a FV estimate of Php166.7/sh. Given FPH’s 68% ownership in FGEN, we view FPH as a cheaper way to own FGEN. FPH is trading at a huge 59% discount to its market based NAV of Php177.5/sh. Based on FPH’s market price of Php73.50/sh, upside to our FV estimate is significant at 126.8%.

   George Ching

November 17, 2021. Maintaining HOLD rating. We have a HOLD rating on FGEN with a FV estimate of Php35.3/sh. We continue like FGEN given its relatively stable cash flow since bulk of its capacity is contracted. Furthermore, with the Department of Energy’s moratorium on new coal power plants, this could potentially push forward the projected power shortage beginning in 2024, increase in the competitiveness of FGEN’s gas and renewables plants, and improve the feasibility of FGEN’s LNG regasification project which will enable its gas plants to remain viable after the depletion of the Malampaya gas field. At FGEN’s market price of Php30.5/sh., upside to our FV estimate is limited at 15.7%.

   George Ching

November 17, 2021- Maintain HOLD rating We have a HOLD rating on FGEN with a FV estimate of Php35.3/sh. We continue like FGEN given its relatively stable cash flow since bulk of its capacity is contracted. Furthermore, with the Department of Energy’s moratorium on new coal power plants, this could potentially push forward the projected power shortage beginning in 2024, increase in the competitiveness of FGEN’s gas and renewables plants, and improve the feasibility of FGEN’s LNG regasification project which will enable its gas plants to remain viable after the depletion of the Malampaya gas field. At FGEN’s market price of Php30.5/sh., upside to our FV estimate is limited at 15.7%.

   Charles William Ang, CFA

November 17, 2021. Maintaining BUY rating. We currently have a BUY rating on GTCAP with and FV estimate of Php1110/sh. At its current price of Php587, it is trading at 10.9X 2021E earnings, significantly below its historical average P/E of 15X. Current discount to NAV also remains near its historical high at 51%. While the negative sentiment could keep prices depressed in the short term, we believe that these challenges are transitory and that fundamentals remain attractive over the long term.

   Justin Richmond Cheng, CFA

November 16, 2021- Maintain HOLD rating We currently have a HOLD rating on EMP with a FV estimate of Php17.1/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, there is currently no more upside to our FV estimate. We recommend for clients to wait for dips near Php14.8/ sh before buying the stock.