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Daily Edge Summary - August 17, 2015

Core Content

The document provides an overview of the financial performance and market outlook for several companies in the Philippines, focusing on the transport, property, consumer, and utilities sectors. It includes key financial metrics, analyst views, and ratings for the mentioned firms.

Key Financial Highlights

Main Points and Key Information

Transport Sector

• Cebu Air Inc (CEB):
  • Achieved a record 2Q15 core net profit of PHP2,945m, up 45.7% YoY and 13.5% QoQ.
  • Total revenue for 2Q15 was PHP15.3b, up 2.4% YoY.
  • The company’s performance exceeded expectations, and the analysts expect upgrades and upward revisions in earnings forecasts.
  • Maintained BUY recommendation with an unchanged target price of PHP116 based on an 8x FY15 PER.
  • The company benefited from higher asset utilisation and superb cost control.

Property Sector

• Robinsons Land Corp (RLC):

  • 9MFY9/15 core net profit reached PHP4.3b, up 12.2% YoY and 73% of full-year forecast.
  • Malls, offices, and hotels drove strong results.
  • Residential revenue increased only 5% in 9MFY9/15, but the company reported strong performance in the mall and office segments.
  • Maintained HOLD rating with unchanged forecasts.

• Filinvest Land Inc (FLI):

  • Raised PHP8b from a bond offering to finance construction projects.
  • Maintained BUY rating for the company.

Consumer Sector

• Robinsons Retail Holdings Inc (RRHI):
  • 2Q15 net income grew 34% YoY to PHP1.08b.
  • 1H15 profits reached PHP1.86b, up 36% YoY.
  • Sales growth in 2Q15 was 10.7% to PHP21.6b and 11.8% in 1H15 to PHP41.3b.
  • Supermarkets accounted for around half of consolidated sales and EBIT.
  • SSSG for various formats grew slightly, though it slowed due to weaker supermarket performance.

Utilities Sector

• First Gen Corp (FGEN):
  • 1H15 recurring net income dipped to USD83.9m due to the outage of the Tongonan plant, trading losses, higher operating expenses, and typhoon-proofing works.
  • Natural gas-fired plants contributed more due to lower interest expenses and insurance claims.
  • Maintained BUY rating.

Market Highlights

• CEB (PHP94.15):

  • 6M-2015 core net profit reached PHP5,540m, up 128.5% YoY.
  • The company's performance is expected to be a record year.
  • Analysts expect upward revisions in earnings forecasts.

• RLC (PHP29.00):

  • Core net profit reached PHP4.3b, with 9M9/15 EBITDA margin slightly improving.
  • The company is expected to maintain strong performance for the remainder of the fiscal year due to increasing affluence and BPO growth.
  • Maintained HOLD rating.

Valuation and Performance Metrics

CEB Valuation Table

RLC Valuation Table

The Week Ahead

The document also outlines the earnings and valuations of various stocks as of August 14, 2015, including the following highlights:

• BDO:

  • 2014 Net Profit: PHP22,466m
  • 2015F Net Profit: PHP25,723m
  • Target Price: PHP123.00
  • Upside: 19%
  • Rating: BUY

• BPI:

  • 2014 Net Profit: PHP18,039m
  • 2015F Net Profit: PHP18,924m
  • Target Price: PHP94.00
  • Upside: 1%
  • Rating: HOLD

• CEB:

  • 2014 Net Profit: PHP5,116m
  • 2015F Net Profit: PHP4,670m
  • Target Price: PHP62.00
  • Upside: 60%
  • Rating: BUY

• RLC:

  • 2014 Net Profit: PHP3,969m
  • 2015F Net Profit: PHP4,670m
  • Target Price: PHP62.00
  • Upside: 60%
  • Rating: BUY

• JFC:

  • 2014 Net Profit: PHP5,362m
  • 2015F Net Profit: PHP5,405m
  • Target Price: PHP215.00
  • Upside: 14%
  • Rating: BUY

• PIP:

  • 2014 Net Profit: PHP811m
  • 2015F Net Profit: PHP937m
  • Target Price: PHP5.10
  • Upside: 10%
  • Rating: BUY

• RFM:

  • 2014 Net Profit: PHP838m
  • 2015F Net Profit: PHP951m
  • Target Price: PHP5.60
  • Upside: 31%
  • Rating: BUY

• URC:

  • 2014 Net Profit: PHP11,423m
  • 2015F Net Profit: PHP11,423m
  • Target Price: PHP235.00
  • Upside: 24%
  • Rating: BUY

Analysts

The analysts involved in the report include:

• Luz Lorenzo
• Ramon Adviento
• Michael Bengson
• Rommel Rodrigo
• Lovell Sarreal
• Katherine Tan

They provide insights and ratings for various companies, including CEB, RLC, and others.

Conclusion

The report highlights strong performances in the transport and property sectors, particularly for Cebu Air Inc and Robinsons Land Corp, with positive outlooks and continued BUY ratings. The consumer and utilities sectors also showed positive trends, although some companies like First Gen Corp faced challenges due to operational issues. Overall, the analysts maintain their ratings and forecasts, with a focus on continued growth and operational efficiency.