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报告摘要

Summary of GT Capital Holdings Inc (GTCAP PM)

Core Content

GT Capital Holdings Inc (GTCAP) is a diversified conglomerate with a strong presence in financials, industrials, and property, and is a holding company of the Ty family. The company is currently valued at PHP790.00 with a target price of PHP860.00, which represents a 9% increase. GTCAP has a market capitalization of USD3.1B and an average daily trading volume (ADTV) of USD3M.

Main Points

Business Units Overview

Metropolitan Bank and Trust Co (MBT): Second largest bank in the Philippines, with a 14% share of loans and deposits. GTCAP owns 25.1% of MBT and uses its extensive branch network for cross-selling and financing.
Toyota Motor Philippines (TMP): 51%-owned by GTCAP, it holds a 36% market share in the auto industry.
Global Business Power (GBP): Leading independent power producer in the Visayas region with 426 MW in net attributable capacity. A new 82-MW clean coal-fired power plant is expected to boost earnings in 2015.
Federal Land Inc (FedLand): A real-estate developer with a focus on mid- to high-end residential and master-planned developments in Mega Manila.
Philippine AXA Life Insurance: Fourth largest in the insurance market, with a 32.3% stake by GTCAP.
Charter Ping An Insurance Corp (CPAIC): A non-life insurer, also fourth in its market, fully owned by GTCAP.

Strong Synergies

Synergies between the business units are significant, with MBT financing TMP and FedLand, and its branch network aiding in cross-selling insurance products.
The company has a solid financial position with a net debt-to-equity ratio of 0.41x in FY14 and 0.26x in FY15, indicating strong leverage management.

Earnings Growth

GTCAP is forecasted to have a 24% annual earnings growth from FY14 to FY15.
The main contributors to earnings are MBT, which accounts for over 35% of total earnings in FY14, and TMP, which is expected to contribute 34% in FY14.
FedLand is projected to show a significant jump in earnings, up 96% in FY14.

Valuation and Investment Thesis

The target price of PHP860.00 is based on a sum-of-parts valuation with a 10% conglomerate discount, resulting in a 14.8x 2014F PER.
Despite the strong growth prospects and market positions, the current share price has largely priced in these expectations, limiting potential upside.
GTCAP is recommended to be bought at below PHP782, as the target price is not significantly above the current valuation.

Market Position and Shareholder Structure

GTCAP is the second-largest listed company in the Philippines by market capitalization, with a 1.4% share of the total market cap.
Major shareholders include the TY family (59%), Capital Research & Management Co. (3%), and Schroder Investment Management (1%).

Key Information

Financial Metrics

FYE Dec (PHP m)	FY11A	FY12A	FY13E	FY14E	FY15E
Revenue	6,844.7	19,610.7	104,327.7	132,558.0	152,176.8
EBITDA	3,876.8	9,286.0	17,226.5	21,761.1	25,887.9
Core Net Profit	3,324.4	6,554.9	8,172.9	10,138.7	12,599.8
Core EPS (PHP)	26.60	44.27	46.89	58.17	72.29
Core EPS Growth (%)	10.8	66.4	5.9	24.1	24.3
Net DPS (PHP)	4.00	3.17	3.00	3.00	3.00
Core P/E (x)	29.7	17.8	16.8	13.6	10.9
P/BV (x)	2.8	2.3	2.0	1.7	1.5
Net Dividend Yield (%)	0.5	0.4	0.4	0.4	0.4
ROAE (%)	9.6	12.7	10.8	10.9	11.6
ROAA (%)	5.5	6.3	5.3	5.3	5.8
EV/EBITDA (x)	na	15.9	10.8	8.7	7.3
Net Debt/Equity (%)	76.7	81.1	46.5	40.3	26.5

Key Growth Drivers

Strong domestic economic growth, with GDP increasing at 7.2% YoY in FY13.
A young and expanding population (97 million, 60% under 30 years old) that supports consumption and investment.
Strategic acquisitions and capital raising that have significantly increased GTCAP's asset base and exposure to key industries.

Recent Activities and Acquisitions

GTCAP has been actively consolidating its holdings, acquiring stakes in TMP, GBP, and CPAIC.
The company has raised capital through equity placements and bond issuances to fund expansion and new projects.

Valuation Methods

MBT: Valued at PHP88/sh using PBV and PER, with an estimated ROE of 11.9%.
TMP: Valued at PHP100b using DCF, with a 2014F PER of 18.8x.
GBP: Valued at PHP39.88b with a 10% conglomerate discount.
FedLand: Valued at PHP32.7b using DCF and NAV methods.
AXA: Valued at PHP21.5b using a regional PER average.
CPAIC: Valued at PHP3.9b using a regional PBR average.

Investment Outlook

The company is recommended with a HOLD rating due to limited upside potential.
The strong synergy and growth potential of the business units are well reflected in the current share price.
GTCAP is well-positioned to benefit from the growing domestic economy and is looking for new synergistic investments.

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