20140521-Maybank_KERPL-Daily_Edge_15页_416kb

报告摘要

Daily Edge Summary - 21 May 2014

Core Content

The document provides a summary of financial performance and market insights for several companies in the banking and utilities sectors in the Philippines, with a focus on key metrics, analyst views, and future outlooks.

Key Financial Metrics

Metric	Value	% Chg
PSEi	6,882.73	0.17%
Turnover (PHPm)	10,413.43	27.43%
PLDT ADR (USD)	66.60	-0.40%
PLDT ADR (PHP)	2,913.75	-0.12%
Ave interbank rate	2.03	3.13 bps
PHP/USD rate	43.73	-0.22%

Analysts

Luz Lorenzo: Head of Research / Economist, contact: (632) 849 8836, luz_lorenzo@maybank-atrke.com
Laura Dy-Liacco: Analyst, contact: (632) 849 8840, laura_dyliacco@maybank-atrke.com
Rommel Rodrigo: Analyst, contact: (632) 849 8839, rommel_rodrigo@maybank-atrke.com
Lovell Sarreal: Analyst, contact: (632) 849 8841, lovell_sreal@maybank-atrke.com
Katherine Tan: Analyst, contact: (632) 849 8843, kat_tan@maybank-atrke.com
Ramon Adviento: Analyst, contact: (63) 28498845, ramon_adviento@maybank-atrke.com

Top Idea: Utilities Sector

Energy Development Corp (EDC)

Current Price: PHP6.17
Rating: BUY (Unchanged)
Target Price (TP): PHP7.25 (up 5% from previous)
Key Points:
- 1Q14 recurring profits were in line with expectations, representing 28% of 2014 full-year forecast.
- Revenues from Leyte are expected to improve in Q2, and new project commissions will support top-line growth.
- The 63-MW expansion of the Burgos wind project is expected to add significant revenue.
- 2014 and 2015 recurring earnings forecasts are raised by 1% and 4%, respectively.
- EDC is optimistic about its wind projects and their potential to secure feed-in tariff incentives.

Market Talk

Philippine National Bank (PNB)

Current Price: PHP92.95
Rating: BUY (Unchanged)
Target Price (TP): PHP109
Key Points:
- 1Q14 net income dropped 52.6% YoY to PHP1.34b, but in line with full-year forecast.
- Core lending business improved, with interest income on loans up 29.1%.
- Integration with Allied Banking Corp is expected to provide annual savings of PHP500m once the headquarters relocation is completed.
- PNB is a strong acquisition target, with potential upside of 19%.
- ROE was 6.3%, and CET1 ratio is at 16.05% under Basel III.

Rizal Commercial Banking Corp (RCB)

Current Price: PHP57.70
Rating: BUY (Unchanged)
Target Price (TP): PHP65
Key Points:
- 1Q14 net profit dropped 25% YoY to PHP1.33b due to a 80% slump in trading gains.
- Net interest income increased 26.3% to PHP3.8b, driven by 24% loan growth.
- RCB is expected to issue PHP10b in Tier 2 notes to improve capital adequacy.
- The bank may need additional capital to reach a CET1 ratio of 13%, supporting its growth strategy.

Conglomerates

Alliance Global Group Inc (AGI)

1Q14 Net Income: PHP3.9b, up 11% YoY
Main Contributors:
- Megaworld Corp (MEG): BUY, net income up 49%
- Travellers International Hotel Group (RWM): BUY, core earnings up 86%
- Emperador Inc (EMP): Not rated, earnings up 19%
Tempered Growth: Decline in profits from Golden Arches Development Corp (GADC) due to higher raw material costs.

DMCI Holdings Inc (DMC)

1Q14 Net Income: PHP2.5b, down 75% YoY due to one-time gains in 2013.
Core Profit Growth: 39% YoY, driven by coal mining, construction, and real estate.
Coal Mining: Profits up 756% YoY to PHP558m, due to higher sales and prices.
Construction: Profits up 87% YoY to PHP161m, with improved margins.
Real Estate: Profits up 20% YoY to PHP762m, from higher sales.

Utilities Sector: Angat Hydro Plant

Partnership: San Miguel Corp (SMC) and First Gen Corp (FGEN) will partner with K-water.
Ownership: SMC and FGEN will each own 30%, K-water will own 40%.
Asset Turnover: Expected to be handed over to K-water next month.
Purpose: Operations and management of the 218-MW privatized segment of the Angat hydro plant.
Water Usage: Provides water for the Angat hydro power plant, irrigation, and potable water in Metro Manila.

Capital Adequacy and Stress Tests

BSP Stress Test: Banks with significant real estate exposure may be required to submit exit plans.
Real Estate Exposure: 21.8% of total loan portfolio, up 7.1% QoQ to PHP1t.
NPLs: Managed at 2.8%, with a NPL cover ratio of 70.6%.
Consumer NPLs: Only 0.84% of total loan portfolio, indicating strong asset quality.

The Week Ahead

21 May: GMA Network, Inc.
23 May: Union Bank of the Philippines, Pacific Online Systems Corporation, Splash Corporation
24 May: The Philippine Stock Exchange, Inc.
26 May: First Philippine Holdings Corporation, Anchor Land Holdings, Inc.
27 May: Philippine National Bank, Citystate Savings Bank, Inc., Manila Electric Company, Premiere Horizon Alliance Corporation
28 May: Liberty Flour Mills, Inc., Rockwell Land Corporation, Benguet Corporation, Keppel Philippine Holdings, Inc.
All listed companies will have Annual Stockholder's Meetings.

Valuation Table (as of 20 May 2014)

Stock	Share Price	Target Price	Upside (%)	Rating	2012 Net Profit	2012 EPS	2012 EPS Growth	PE	DPS	Yield	BV/share	P/BV	Net Gearing	ROA	ROE
BDO	88.70	93.50	5	HOLD	14,153	4.52	16.2	19.6	-	-	27.19	2.1	-	1.2	11.7
BPI	89.00	93.50	5	HOLD	16,352	4.60	26.8	19.4	2.30	2.6	27.19	3.3	-	1.8	17.8
CHIB	55.50	60.00	8	HOLD	5,018	3.51	-1.1	15.8	1.20	2.2	29.77	1.9	-	1.7	12.3
EW	31.20	31.80	2	HOLD	1,750	1.55	-56.9	20.1	1.02	3.3	15.34	2.0	-	1.6	13.7
MBT	89.50	92.00	3	HOLD	11,520	4.20	8.7	21.3	0.77	0.9	38.24	2.3	-	1.1	11.5

Summary of Key Insights

EDC: Expected to benefit from new wind projects in 2H14, with improved earnings forecasts.
PNB: Maintains BUY rating due to merger benefits and potential capital gains.
RCB: Maintains BUY rating with revised TP and capital-raising plans.
Real Estate Exposure: A significant portion of bank portfolios, with potential stress test implications.
Consumer Loans: Growing, with strong asset quality and low NPLs.
Conglomerates: AGI and DMC showed strong performance, driven by their subsidiaries.
Market Outlook: Positive for PNB and RCB due to integration and capital-raising, respectively.