Alerts

   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.

   Adrian Alexander Yu

November 16, 2021. Increasing estimates on GCash revaluation; Maintaining HOLD rating. We are increasing our earnings estimates on GLO to account for Mynt’s better than expected operating results while factoring in the recent funding round which valued Mynt at over US$2Bil. After factoring in our adjustments, we increased our FV estimate on GLO slightly by 4.5% to Php3,030/sh from Php2,900/sh. Despite factoring in Mynt’s recent revaluation to double unicorn status, we still believe that the stock is trading at expensive valuations at its current price of Php3,380/sh. Thus, we are reiterating our HOLD rating on GLO.

   John Martin Luciano, CFA

November 16, 2021. We currently have a BUY rating on PNB with a FV estimate of Php52.5/sh based on 0.55X 2021E P/BV. We expect PNB to benefit as the economy gradually recovers. Note that the bank’s asset quality was severely impacted by the COVID-19 pandemic its gross NPL ratio is one of the highest in the industry. On the positive side, asset quality outlook has gradually improved following the easing of restrictions in Metro Manila as well as increasing inoculation rate in the country. Moreover, the bank increased its provisioning which improved its NPL cover. At its current price, the bank is only trading at 0.2X 2022E P/BV, the lowest among banks in our coverage and significantly below the industry average of 0.8X.

   Adrian Alexander Yu

November 16, 2021. Maintaining BUY rating. We are maintaining our BUY rating on HOME with an FV estimate of Php11.30/sh. At its current price of Php9.85/sh, capital potential appreciation is attractive at 14.7%. We continue to like HOME because of its aggressive store expansion plan, consistent margin expansion, and growing presence in the home improvement and urban gardening industry.

   Adrian Alexander Yu

November 16, 2021. Reducing estimates, maintaining HOLD rating. We are reducing our estimates to account for EEI’s lower-than-expected earnings. After factoring in these adjustments, our FV estimate on EEI fell by 3.6% to Php7.13/sh from Php7.39/sh. We are still maintaining our HOLD rating on the company. Nonetheless, we continue to have a 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 of Php48.5Bil.

   Richard Lañeda, CFA

November 16 ,2021. We are raising our FV estimate on AGI from Php15.86 to Php23.39 following the increase in our fair value estimates for MEG and EMP. Recall that we raised our MEG fair value estimate to factor in the market value of MREIT while EMP’s fair value estimate was raised on Oct.20, 2021 following the increase in revenue and net income forecast for 2021 and beyond. We are maintaining our BUY rating on AGI following its strong earnings. We believe AGI shares are very undervalued. AGI’s stake in EMP is already worth more than AGI’s market cap. At EMP’s current price of Php18.16/sh, AGI’s stake is worth Php237.19 Bil. This is equivalent to Php25 per share of AGI. If we deduct parent level net debt as of 2Q21, the value of AGI’s stake in EMP still comes out to Php221.19 Bil, which is 106% higher than AGI’s market capitalization based on its current price. In addition, AGI, through Travellers, MEG, and Golden Arches, is well positioned to benefit from the reopening of the economy.

   Richard Lañeda, CFA

November 16, 2021. Maintain BUY and fair value estimate of Php5.98. We are maintaining our BUY rating on VLL with a fair value estimate of Php5.98. We expect weakness in real estate revenues to be temporary and are encouraged by the resiliency of its reservation sales, which has pushed unbooked revenues up to Php69 Bil from Php61 Bil at the end of 2020.

   George Ching

November 15, 2021. Maintaining HOLD rating We have a HOLD rating on JGS with a FV estimate of Php61.2/sh. We like JGS as it is well positioned to capitalize on the favorable long term growth outlook of the Philippine economy given the market leadership position of its operating subsidiaries, the parent company’s strong balance sheet and the excellent track record of its management team. However, it is also sensitive to the ongoing COVID-19 crisis as vulnerable sectors accounted for 53% of NAV. Moreover, at its current prices of Php61/sh, there is no more upside to our FV estimate.

   Richard Lañeda, CFA

November 15, 2021. FV raised to Php962. Our fair value estimate for AC is raised to Php962 from Php917 after factoring in the higher fair value estimate for ALI (from Php39.1 to Php43.20) and MWC (from Php19 to Php24). 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.

   Frances Rolfa Nicolas

November 12, 2021 - Maintain HOLD rating Given the probable extension of the East Zone, we are extending our valuation by 9 years to 2046. Note, however, that we base our valuation mostly on the original concession agreement as details of the revised concession agreement are still under review. Specifically, we assumed a ~60% increase in capex for the extension and resumption of the rebasing tariff hikes in 2023. Moreover, we are factoring the new businesses, Pangasinan bulk water and KSA MOM contracts, to our valuation. These 2 expansions increased our 2022 net income estimate by 6.2% to Php5.8Bil. Accordingly, we raise our FV estimate to Php27.0/sh. At its current price, upside potential to our new FV estimate is limited at 10%. Moreover, we will likely be doing another round of adjustments once the details of the revised concession agreement becomes available. As such, we maintain our HOLD rating on MWC.