Alerts

   John Martin Luciano, CFA

February 02, 2021. We currently have a HOLD rating on UBP with a FV estimate to Php75.7/ sh based on a 0.95X 2021E P/ BV (adjusted for goodwill). We expect net interest margin to be pressured as loans re-price following the aggressive monetary easing conducted last year. In addition, we expect asset quality to continue deteriorating amidst the impact of the pandemic. Note that its consumer loans account for higher portion of its total loans (~32%) compared to most banks.

   Charles William Ang, CFA

February 01, 2021. We currently a BUY rating on GTCAP with an FV estimate of Php1020/ sh. At its current price of Php534, it is trading at 8.2X 2021E earnings, significantly below its historical average of 15X. While the provisional safeguard duty might delay the recovery in TMP’s car sales, we believe that the current valuations of GTCAP provide enough buffer going forward.

   George Ching

January 15, 2021. Power demand will most likely continue to recover in 2021 as the economy slowly reopens. However, it will most likely still be slightly below 2019 levels.

   George Ching

January 15, 2021. Although FGEN and ACEN are less vulnerable to the risks facing the power industry, both stocks are no longer attractive in terms of valuation. In fact, although ACEN’s earnings are projected to grow by 63.5% to Php6.7Bil largely due to the injection of Presage (which holds AC Energy’s international power assets) into ACEN, EPS will drop by 31.4% since ACEN issued new shares in exchange for shares in Presage.

   George Ching

January 15, 2021. Although FGEN and ACEN are less vulnerable to the risks facing the power industry, both stocks are no longer attractive in terms of valuation. In fact, although ACEN’s earnings are projected to grow by 63.5% to Php6.7Bil largely due to the injection of Presage (which holds AC Energy’s international power assets) into ACEN, EPS will drop by 31.4% since ACEN issued new shares in exchange for shares in Presage.

   George Ching

January 15, 2021. We also like MER. We forecast MER’s profits to grow by only 5.9% in 2021. However, its profitability is least vulnerable to the risks facing the power industry (lower selling prices, higher coal costs and unplanned outages) because bulk of its profits come from the distribution business. MER’s valuation has also become attractive with the stock trading at 16.1X 2021 P/E, below its 10-year historical average of 17.5X. Based on MER’s current market price of Php297/sh, upside to our FV estimate is at 24.3%.

   George Ching

January 15, 2021. We like AP because we expect its profits to recover sharply in 2021, by 74.6% to Php17.6Bil, as it benefits from higher WESM prices and the start of operations of the 1,200MW Dinginin Coal Project (unit 1 beginning in 2Q21, unit 2 beginning in 3Q21). Its 2020 profits were also negatively affected by unplanned outages of its coal plants. Moreover, AP’s share price has declined by 23% in the past 12 months, underperforming the PSEI’s 9.9% decline. This has made AP’s valuation increasingly attractive, with the stock trading at 11.2X 2021 P/E, below its 10-year historical average of 13.6X. Based on AP’s current market price of Php26.65/sh, upside to our FV estimate is at 51.6%.

   Adrian Alexander Yu

January 18, 2021. We recently raised our FV estimate for both GLO and TEL by 6.9% and 7.1% to Php2,400/ sh and Php1,800/sh due to the reduction in equity risk premium to 6.5% from 9.0%. We also have a BUY rating on both stocks.

   Adrian Alexander Yu

January 18, 2021. We recently raised our FV estimate for both GLO and TEL by 6.9% and 7.1% to Php2,400/ sh and Php1,800/sh due to the reduction in equity risk premium to 6.5% from 9.0%. We also have a BUY rating on both stocks.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.