Alerts

   Richard Lañeda, CFA

November 09,2021.Raising FV estimate to Php10.70. We are raising our FV estimate on BLOOM from Php9.20 to Php10.70 after factoring in higher revenue and net income estimates for 2022 and 2023. We maintain our BUY rating on BLOOM as we believe the company will be one of the major beneficiaries of the eventual full reopening of the economy and the opening of our country’s borders in the future when the COVID-19 pandemic is abated.

   John Martin Luciano, CFA

November 08, 2021. Maintain HOLD. We are maintaining our HOLD rating on UBP with a FV estimate to Php83/ sh based on a 1.0X 2022E P/BV (adjusted for goodwill). Outlook for loan growth remains muted this year amidst the impact of the pandemic. Nevertheless, 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, at its current price, the bank is already trading at 1.1X 2022E P/BV, significantly above the industry average of 0.7X.

   John Martin Luciano, CFA

November 08, 2021.Reiterate BUY. We reiterate our BUY rating on MBT with an FV estimate of Php98/sh based on 1.25X 2022E P/BV. We continue to like MBT as it has a) lower exposure to riskier segments, with consumer accounting for 21% of total loans, b) high NPL coverage ratio at 179%, c) and better access to liquidity given its large CASA deposit. Note that the government recently announced that Metro Manila will be placed under a more relaxed Alert Level 2. This bodes well for asset quality as more businesses are permitted to resume operations and operate at a higher capacity. At its current price, the bank is trading at a steep discount vs its peers at 0.6X 2022E P/BV (vs BDO’s 1.2X and BPI’s 1.3X) despite being better capitalized and having higher NPL cover ratio.

   George Ching

November 05, 2021. Maintaining HOLD rating. In light of the increase in our EBITDA estimates, we are raising our FY21 net income forecast by 9.1% to US$410.8Mil, and our FY22 forecast by 8.8% to US$449.3Mil. We are also increasing our FV estimate for ICT by 7.6% to Php183.4/sh. We are maintaining our HOLD rating on ICT. We continue like ICT given the success of ICT’s greenfield ports in Australia, Congo and Rio as these ports will be the key earnings growth driver for the company in the next few years. Despite the lingering impact of the COVID-19 pandemic on global trade, we believe that the company’s earnings will continue to grow going forward following the recovery in global trade and the company’s cost reduction initiatives. However, ICT’s share price has increased by 44% in the YTD period, outperforming the PSEi’s 0.9% increase during the period. Based on its current market price of Php178/sh, upside to our FV estimate is limited at 3%.

   George Ching

November 5, 2021 - Maintaining HOLD rating In light of the increase in our earnings estimates for AP, we are raising our FY21 core net income forecast for AEV by 10.7% to Php17.6Bil, and our FY22 forecast by 2.7% to Php16.7Bil. We are increasing our FV estimate for AEV by 1.8% to Php55.92/sh. We are maintaining our HOLD rating for AEV. We continue to like AEV given the expansion plans of its power subsidiary AP. AEV is also well positioned to benefit in the government’s 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 8% in the YTD period, outperforming the PSEI’s 0.9% gain. Based on its current market price of Php51/sh, upside to our FV estimate is limited at 9.7%.

   George Ching

November 5, 2021- Reiterate HOLD rating. We have a HOLD rating on ACEN with a FV estimate of Php5.57/sh. We continue to like ACEN given the rapid growth of its power generation portfolio and its focus on renewable energy. From ~2,589MW currently, the company plans to grow its attributable capacity to 5,000MW by FY25, 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 Php12.26/sh, ACEN is trading at 48.7X FY22E P/E, which is significantly above the 17X average 22E P/E of local power companies.

   George Ching

November 05, 2021. Maintaining BUY rating. In light of the increase in our EBITDA forecast for the power generation business, we are raising our FY21 core net income forecast for AP by 15.6% to Php17.1Bil. We are also raising our FV estimate for AP by 3.5% to Php46.5/sh. We are maintaining our BUY rating on AP. We like AP as we believe that the company’s earnings have already bottomed out (with 1H21 earnings increasing by 143% 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 12.1X 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 Php1.0/sh, this provides a decent dividend yield of 3.1%. The upside to our FV estimate is very high at 40%.

   George Ching

November 5, 2021 -Raising estimates, maintaining HOLD rating. In light of our higher sales volume and LME price estimates, we are increasing our FY21 net income forecast by 24% to Php7.7Bil. We are also raising our FV estimate for NIKL by 12.2% to Php6.15. We are maintaining our HOLD rating for NIKL. We continue to like NIKL given that near term prices for nickel will continue to be supported by the Indonesian nickel ore export ban. Furthermore, we remain positive on the long term outlook for nickel due to the rising EV battery demand. However, at its current price of Php5.61/sh, upside to our FV estimate is limited at 9.6%.

   Adrian Alexander Yu

November 05, 2021. Reiterate BUY rating with upside risk from PayMaya revaluation. We reiterate our BUY rating on TEL with an FV estimate of Php2,030/sh. However, our FV estimate still has upside risk from PayMaya’s revaluation. Assuming that PayMaya’s valuation is US$1Bil or Php50Bil, TEL’s 38.5% equity interest in the fintech is worth Php19.3Bil. This translates to around Php90/sh or 4.4% of TEL’s FV estimate. At the current price of Php1,624/sh, capital appreciation potential is attractive at 25.0%. We continue to like TEL due to the strong growth of its mobile data business, dominant position in the home broadband business, and the growing fintech operations of PayMaya.

   Richard Lañeda, CFA

November 04, 2021.Raising FV estimate to Php43.20, BUY rating maintained. We are raising our fair value estimate for ALI from Php39.10 to Php43.20 after factoring in higher estimate values for its mall and office segments. We maintain our BUY rating on ALI given the 19.1% upside from the current market price to our fair value estimate. We believe ALI is one of the main beneficiaries of the continued relaxation of the country’s quarantine restrictions through its malls, hotels, and residential segments.