Alerts

   George Ching

August 11, 2020. We have a BUY rating on SCC with a FV estimate of Php25.60/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 5.7X 21E P/E based on our earnings forecast. Capital appreciation is also significant at 150% based on our fair value estimate.

   George Ching

We have a BUY rating on NIKL with a FV estimate of Php3.06/sh. We believe that despite the impact of the Covid-19 pandemic, 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 electric vehicle battery demand. At NIKL’s current price of Php2.82/sh, upside to our FV estimate is at 8.5%.

   George Ching

August 7, 2020. Despite the lower than expected 1H20 results, we are increasing our 2020E earnings forecast by 1.7% to US$258Mil and our 2021E forecast by 3.4% to US$310Mil following the company’s better than expected outlook as the recovery in volume appears to be faster than expected. In addition to the increase in our earnings forecast, we are also raising our FV estimate for ICT by 20.2% to Php116.8/sh after cutting our risk free rate assumption to 4% from 6%, and after we rolled over our estimates to 2021. We are upgrading our rating on ICT to BUY from HOLD. With the exception of its port in Argentina, the success of ICT’s greenfield ports (Australia, Congo, Papua New Guinea and Colombia) will be the key earnings growth driver for the company in the next few years as these new ports will have a combined capacity of 3Mil TEU, equivalent to 29% of ICT’s total volume in 2019. Despite the headwinds brought about by the COVID-19 pandemic on 2020 earnings, we believe that the company’s earnings is set to rebound next year following the recovery in global trade and the company’s cost reduction initiatives . Based on its current market price of Php97.5/sh, upside to our FV estimate is significant at 19.42%.

   Adrian Alexander Yu

August 07, 2020. We recently raised our FV estimate for TEL by 32.3% to Php1,640/sh from Php1,240/sh due to the reduction in risk-free rate assumption to 4.0% from 6.0% and after rolling over our estimates to 2021. We also upgraded our recommendation to a BUY due to the company’s good fundamentals and attractive valuation. We continue to like TEL because of a) the strong growth of its mobile data business; b) its dominant position in the home broadband business and c) its strong balance sheet. At its current price of Php1,370/sh, capital appreciation potential is attractive at 19.7% while providing a dividend yield of 5.5%.

   Richard Lañeda, CFA

August 05, 2020. We are reducing our FV estimate from Php33.70 to Php31.40 as we factor in a slower than initially anticipated recovery in revenues and earnings of SMPH. Due to the rising cases of COVID-19 in the Philippines, the risk of a prolonged quarantine period is heightened. Given its huge exposure to mall leasing, SMPH is expected to be greatly affected by the quarantine period and rising COVID-19 crisis which affects consumer behavior. We maintain our HOLD recommendation on SMPH.

   Justin Richmond Cheng, CFA

August 4, 2020. Raising FV estimate, upgrading to BUY. Apart from the increase in our earnings forecast, we also reduced our risk free rate assumption from 6% to 4%, and we rolled over our estimates to 2021. These changes increased our FV estimate on URC to Php147/sh. Despite the challenging economic environment due to COVID-19, URC has shown its resilience. We think this is a good sign that the company is prepared and well-equipped to weather through additional challenges that may come amid the deepening effects of the global pandemic. At its current price, upside to our estimate is also significant at 20%; hence, we are upgrading our rating on URC to a BUY.

   George Ching

August 03, 2020. Despite the reduction in our earnings forecast, we are raising our FV estimate on AP by 8% to Php33.6/sh., after we cut our risk-free rate assumption to 4% from 6% and rolled over our estimates to 2021. We are also upgrading our rating on AP to BUY from HOLD. Despite the poor 1H20 results, we believe that AP’s earnings already bottomed in 2Q20 as a result of the impact of the Covid-19 pandemic. We expect earnings to grow at a CAGR of 43% from 2020E-2022E. AP’s valuation has also become increasingly attractive with the stock trading at 10.6X 2021 P/E, below its 10-year historical average of 12.7X. Based on AP’s current market price of Php27.7/sh, upside to our FV estimate is at 30.6%

   George Ching

August 3, 2020. Due to the reduction in our estimates for AP, we are lowering our earnings 2020E earnings forecast for AEV by 9.9% to Php12.3Bil. Despite the reduction in our earnings forecast, we are raising our FV estimate on AEV by 12.1% to Php38.6/sh., after we cut our risk-free rate assumption to 4% from 6% and rolled over our estimates to 2021. Meanwhile, we are maintaining our HOLD rating on AEV. We continue to like AEV given the expansion plans of its power subsidiary AP. AEV is also well positioned to participate in the government’s infrastructure projects owing to its investment in republic cement as well as its strong balance sheet and excellent track record in acquiring businesses. However, based on its current market price of Php49.5/sh, there is no more upside to our FV estimate.

   COL Research Team

July 30, 2020. (Data from PH Market Strategy report) Due to our higher FV estimates resulting from our lower risk-free rate assumption and the rollover to 2021, we upgraded our recommendation on BPI, AP, CIC, CNPF, DNL, PGOLD, TEL, GLO and ALI from HOLD to BUY. We are maintaining our recommendation on the rest of the stocks in our coverage list, although capital appreciation potential has increased.

   COL Research Team

July 30, 2020. (Data from PH Market Strategy report) Due to our higher FV estimates resulting from our lower risk-free rate assumption and the rollover to 2021, we upgraded our recommendation on BPI, AP, CIC, CNPF, DNL, PGOLD, TEL, GLO and ALI from HOLD to BUY. We are maintaining our recommendation on the rest of the stocks in our coverage list, although capital appreciation potential has increased.