Alerts

   Frances Rolfa Nicolas

October 15, 2021. Maintain BUY rating. Accordingly, we are reducing our FV estimate to Php1.70/sh. Despite rising costs, we remain optimistic on the construction industry’s recovery as the government ramps up infrastructure building and as property firms resume their deferred projects this year. At its current price of Php1.27/sh, upside potential to our FV estimate remains significant at 34%. As such, we maintain our BUY rating on CHP.

   Justin Richmond Cheng, CFA

October 20, 2021. We are upgrading our forecasts to factor in the outperformance in 1H21 due to stronger-than-expected sales and higher margins. We raised our revenue forecast by 8.8% in 2021, and we increased our gross and EBITDA margin by 370 bps and 840 bps, respectively. We also took into account EMP’s strong growth trajectory going forward, supported by its ability to capitalize on the growing demand for single malts and other premiumization trends. Hence, we raised our 2022 and 2023 sales forecast by 13.3% and 18.0%, respectively. These adjustments increased our earnings estimate for 2021, 2022, and 2023 by 49%, 62%, and 69%, respectively. Following the increase in our earnings forecast, we also increased our FV estimate to Php17.1/sh. We are maintaining our HOLD rating on EMP as there is currently no upside to our FV estimate. We recommend clients to wait for dips near our buy below level of Php14.8/sh before buying the stock.

   George Ching

July 12, 2021. We have a buy rating on MPI with a FV estimate of Php8.30/sh. We are maintaining our BUY rating on MPI. 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 Php3.75/ sh, the company is trading at a 60% 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 96% to Php7.35/sh.

   Justin Richmond Cheng, CFA

July 12, 2021. We are maintaining our BUY rating on RRHI with a FV estimate of Php102/sh. RRHI’s share price has declined by 15% year-to-date, severely underperforming the PSEI (-3.3% YTD). The company is also still trading 22% lower compared to its prepandemic price, despite having good recovery prospects. We think this is not justified given that RRHI is poised to fully recovery above pre-pandemic levels next year based on our forecasts. Furthermore, RRHI is trading at 20X 2021E P/E, which is -1 standard deviation away from its historical average P/E of 22X. In the medium-to-long term, RRHI remains well positioned to capitalize on retail growth opportunities with its diversified portfolio of store formats. Furthermore, growing e-commerce trends bode well for the company given its increased focus on building its online presence

   John Martin Luciano, CFA

July 9, 2021. . We maintain our HOLD rating on UBP with a FV estimate to Php75.7/ sh based on a 0.95X 2021E P/BV (adjusted for goodwill). The weak loan growth outlook coupled with pressure on net interest margin will likely drag net interest income growth this year. On the positive side, the bank believes that NPL ratio has already peaked as it saw gradual repayments and restructuring following the expiration of the loan moratorium of Bayanihan 2. At its current price, the bank is trading at 1.0X 2021E P/BV, above the industry average of 0.7X.

   George Ching

July 7, 2021. We are maintaining our HOLD rating on ICT with a FV estimate of Php142.3/sh. 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 is set to rebound in FY21 following the recovery in global trade and the company’s cost reduction initiatives. However, ICT’s share price has increased by 50% in the past 12 months, outperforming the PSEi’s 10% increase during the period. Based on its current market price of Php164.9/ sh, there is no more upside to our FV estimate.

   Justin Richmond Cheng, CFA

July 1, 2021. We are downgrading our recommendation from BUY to HOLD following the recent share price rally. However, we are maintaining our FV estimate of Php205/sh. We are encouraged by JFC’s sequential improvement in sales, driven by its international segment. Smashburger and CBTL are also showing some green shoots as their profitability continued to improve. However, we believe that valuations are already expensive. At its current price, JFC is already trading at 36.3X 2019 P/E and 76.5X 2021E P/E. Moreover, we note that the discovery of the new delta variant of COVID-19, which is more transmissible, could potentially delay the sales recovery.

   George Ching

May 7, 2021. In line with the increase in our EBITDA forecast and the passage of the CREATE Bill, we are increasing our FY21E earnings forecast by 8.6% to US$337Mil, and our FY22E forecast by 8.4% to US$372.6Mil. We are also raising our FV estimate by 6.8% to Php142.3/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 is set to rebound in FY21 following the recovery in global trade and the company’s cost reduction initiatives. However, ICT’s share price has increased by 55% in the past 12 months, outperforming the PSEi’s 11.4% increase during the period. Based on its current market price of Php128.5/sh, upside to our FV estimate is at 10.8%.

   Adrian Alexander Yu

May 3, 2021. Despite WLCON’s better than expected performance in 1Q21, we are maintaining our earnings estimate and FV estimate of Php18.80/sh as it remains uncertain whether the improvement in gross profit margin is sustainable. The company might also be negatively affected by the latest surge in COVID-19 cases. We are likewise maintaining our HOLD recommendation. At its current price of Php17.60/sh, capital appreciation potential is limited at 6.8%. On a positive note, the gradual rollout of vaccines will likely boost consumer spending and jumpstart construction projects, which should improve the company’s longer-term outlook. We recommend for investors to wait for prices to dip to Php16.3/sh or lower before buying the stock.

   John Martin Luciano, CFA

May 4, 2021. We are maintaining our BUY rating on BDO with a of Php158/sh based on a 1.65X 2021E P/BV. We continue to like BDO as we expect it to be one of the major beneficiaries of the recovery of economic growth as the government eases restrictions amidst the arrival of the vaccines. Moreover, while NPLs have not yet peaked, we believe that the uncertainty on asset quality caused by the loan moratoriums and lockdowns last year have gradually waned over the past several months. Although net interest margin is expected to be pressured as loans gradually re-price amid the low interest rate environment and excess liquidity in the system, we believe most of the negatives have already been priced in.