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报告摘要

Daily Edge Summary - July 3, 2015

Core Content

This document provides an overview of the financial and market activities in the Philippines on July 3, 2015, with a focus on key stock performance, analyst insights, and market developments across various sectors including Banks, Utilities, Property, and Consumer.

Key Financial Data

Indicator	Value (7/2)	% Chg
PSEi	7,578.31	0.04%
Turnover (PHPm)	7,599.45	17.62%
PLDT ADR (USD)	62.79	0.75%
PLDT ADR (PHP)	2,835.28	0.85%
Ave interbank rate	2.50	-3.13 bps
PHP/USD rate	45.16	(0.20)

Analysts

Luz Lorenzo – Head of Research / Economist
Ramon Adviento – Analyst
Michael Bengson – Analyst
Rommel Rodrigo – Analyst
Lovell Sarreal – Analyst
Katherine Tan – Analyst

Top Idea

Utilities

MER (PHP306.00): High yield; upside from generation
- Forecast changes: Lower 2015 earnings by 2% due to the implementation of the interim distribution rate, partly offset by a PHP799m gain from regulator decisions.
- Lower 2017 earnings by 5% due to a delayed commissioning date of San Buenaventura Power to 2019.
- Raise DCF-based target price by 10% to PHP306 due to inclusion of Redondo Peninsula Energy and roll-over of DCF to 2016.
- Increase DPS assumptions for 2015-17 to maintain an 80% payout ratio.
- Expected upside to TP from MER's planned 2×600 MW coal-fired power plant in Atimonan, Quezon.

Market Talk

Banks

UCPB sale: Several parties are interested in the sale, including SMC, US private equity firms, and foreign lenders. The government agency has received 12 letters of intent, with four from foreign firms.

Utilities

EDC: Plans to spend PHP58b over the next 25-30 years to expand its Leyte Geothermal Project by adding 7,106ha. It seeks to amend its environmental compliance certificate to include additional drilling areas.
Retail Electricity Choice: The Department of Energy (DoE) is set to expand the RCOA regime to include establishments with less than 1MW monthly consumption, allowing them to choose their own electricity suppliers by June 25, 2016.

Property

FLI: Won a bid for a 19-hectare lot in Cebu SRP. Plans to develop 70% commercial/office and 30% residential projects. This project complements FLI's City di Mare in Cebu.

Consumer

URC: Commissioned a 46MW biomass plant in Negros Occidental using bagasse. The plant is expected to contribute PHP350m annually to EBIT.

Mining

NIKL: Approved a 100% stock dividend by the SEC, resulting in 3.8b new shares at PHP0.50. This will halve EPS forecasts and target price. Record date is 16 July, payment on 11 August.

Earnings and Valuations (as of 2 July 2015)

Stock	Share Price (PHP)	Target Price (PHP)	Upside (%)	Recommendation	Net Profit (PHPm)	EPS (PHP)	EPS Growth (%)	PE (x)	DPS (PHP)	Yield (%)	BV/share (PHP)	P/BV (x)	Gearing (%)	ROA (%)	ROE (%)
BDO	108.30	123.00	14	BUY	22,466	6.27	0.9	17.3	2.10	1.9	48.56	2.2	(1.0)	13.5	14.0
BPI	94.00	101.00	7	HOLD	18,039	4.62	(10.9)	20.3	0.91	1.0	36.64	2.6	(1.0)	14.0	14.5
CHIB	45.25	51.00	13	HOLD	5,116	3.08	(5.9)	14.7	1.00	2.2	32.09	2.2	(1.0)	1.3	1.3
EW	19.40	29.00	49	BUY	2,073	1.84	0.9	10.6	-	-	19.01	1.0	(1.0)	1.3	1.0
MBT	93.05	105.00	13	BUY	19,614	7.15	(10.9)	13.0	1.00	1.3	50.49	1.8	(1.0)	1.3	1.3
PBB	18.50	18.00	(3)	HOLD	4,602	0.19	15.8	10.3	0.05	2.5	2.02	0.9	(1.0)	4.1	4.3
PNB	66.35	77.00	16	HOLD	5,359	0.67	(8.5)	15.2	-	-	66.02	1.0	(1.0)	1.3	1.3
RCB	38.50	62.00	61	BUY	3,969	3.11	(8.1)	24.7	1.00	1.3	37.47	1.0	(1.0)	1.3	1.3
UBP	60.00	77.00	28	HOLD	8,401	0.36	(6.1)	22.4	-	-	12.38	1.3	(1.0)	1.3	1.3
SMPH	19.94	22.00	10	BUY	19,035	0.69	8.5	29.1	0.18	1.0	5.88	2.8	41.7	5.3	10.5

The Week Ahead

July 9: Events include the Annual Stockholders' Meeting for Top Frontier Investment Holdings, Inc. and Abacore Capital Holdings, Inc.

Summary of Key Points

Market Trends: The PSEi showed a slight increase, with a notable rise in turnover and a positive trend in PLDT ADRs.
Banks: UCPB sale attracted multiple bidders, including foreign entities.
Utilities: EDC plans significant expansion of its geothermal project, while MER's target price is raised due to potential power generation upside.
Consumer: URC's biomass plant is expected to contribute significantly to EBIT.
Mining: NIKL's stock dividend approval affects EPS and target price forecasts.
Property: FLI's recent bid for a lot in Cebu SRP highlights its expansion strategy.
Valuation Insights: The earnings and valuations table provides insights into various stocks, with recommendations and growth projections.