Alerts

   George Ching

May 4, 2021. We have a BUY rating on SCC with a FV estimate of Php28.60/ sh. Despite the very poor earnings outlook of the company, we believe that much of the negative news is already priced-in. The stock is the cheapest among all power companies, trading at only 9.4X 21E P/E based on our earnings forecast. Capital appreciation is also significant at 129.4% based on our fair value estimate.

   Adrian Alexander Yu

May 4, 2021. Due to EEI’s worse-than-expected performance during FY20, we will be reviewing our earnings estimate for 2021 and 2022 to account for the slower than expected recovery in the construction segment. We currently have a HOLD recommendation on EEI with a FV estimate of Php7.07/sh.

   John Martin Luciano, CFA

May 4, 2021. We reiterate our BUY rating on MBT with an FV estimate of Php91.2/ sh based on 1.25X 2021E 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 163%, c) and better access to liquidity given its large CASA deposit. The bank has also been front loading its provisions in 2020 which should allow the bank to resume its growth faster once the economic growth resumes. At its current price, the bank is trading at a steep discount vs its peers at 0.6X 2021E P/BV (vs BDO’s 1.1X and BPI’s 1.3X) despite being better capitalized and having higher NPL cover ratio.

   Frances Rolfa Nicolas

May 03, 2021. In light of the weaker-than-expected 1Q21 results, we will be reviewing our estimates on CHP. We currently have a BUY rating and FV estimate of Php2.0/sh on CHP.

   Justin Richmond Cheng, CFA

May 03, 2021. We currently have a BUY rating on URC with a FV estimate of Php188/sh. Despite the challenges brought about by the COVID-19 pandemic, URC managed to hold its ground with notable market share gains and effective cost control efforts. Furthermore, the continued reopening of the global economy bodes well for the company’s international business. At its current price of Php136.9/sh, URC is already trading at 25X 2021E P/E, which is below its historical average P/E of 28X. Upside to our FV estimate is also significant at 37%.

   Adrian Alexander Yu

April 30, 2021. After factoring in our earnings adjustment, we reduced our FV estimate on IMI by 1.8% to Php11.2/sh from Php11.4/sh. We are also maintaining our HOLD rating. At its current price of Php10.3/sh, capital appreciation potential is limited at 8.7%. Nevertheless, we continue to like IMI as the company continues to show a strong recovery with plans to pursue more projects in fast growing industries such as the electric vehicle market.

   John Martin Luciano, CFA

April 30, 2021. We currently have a BUY rating with a FV estimate to Php40.3/sh based on a 0.95X 2021 P/BV. We expect its lending business and fee-based revenues to pick up in 2021 as economic growth rebounds. Moreover, we continue to like the bank’s low exposure to consumer loans at 20% of total loans vs the median exposure of smaller banks at 30%. Recall that we view auto, credit cards, and SME segments to be the most at risk in asset quality during this pandemic. Although we expect net interest margin to be pressured this year 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.

   Adrian Alexander Yu

April 30, 2021. We currently have a HOLD recommendation on WLCON with a FV estimate of Php18.8/sh. We will come up with a more detailed report following WLCON’s analyst briefing later.

   Justin Richmond Cheng, CFA

April 30, 2021. We currently have a BUY rating on RRHI with a FV estimate of Php97/sh. RRHI experienced a challenging performance in 2020 amid the COVID-19 pandemic. Nevertheless, this is only expected to be temporary as we expect foot traffic and demand in RRHI’s stores to steadily recover amid the gradual reopening of the economy. 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.

   George Ching

April 29, 2021. In line with the passage of the CREATE Bill, we are increasing our FY21E earnings forecast by 2.6% to Php15.97Bil, and our FY22E forecast by 2.7% to Php19.6Bil. We are also raising our FV estimate by 5.1% to Php50.3/sh. We are maintaining our BUY rating on 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. The share price of AEV is also becoming increasingly attractive due to the recent decline. Due to the impact of the Covid-19 pandemic on the earnings of its various businesses, AEV’s share price has declined by 25.2% in the YTD period, underperforming the PSEI’s 9.4% decline. Based on its current market price of Php35.35/sh, upside our FV estimate is significant at 42.3%.