Daily Edge Summary - August 24, 2015
Core Content
The Daily Edge report from August 24, 2015, provides a financial overview of various Philippine stocks and market updates. It highlights key financial metrics, analyst views, and market developments across different sectors, including consumer, mining, telcos, oil, and conglomerates.
Main Financial Highlights
| Metric |
Value (PHPm) |
% Change YoY |
| PSEi |
7,278.98 |
-0.90% |
| Turnover |
5,803.67 |
-3.26% |
| PLDT ADR (USD) |
56.48 |
-4.92% |
| PLDT ADR (PHP) |
2,626.32 |
-4.52% |
| PHP/USD rate |
46.37 |
-0.14% |
| Ave interbank rate |
2.56 |
0 bps |
Analysts
- Luz Lorenzo - Head of Research / Economist
- Ramon Adviento - Analyst
- Michael Bengson - Analyst
- Rommel Rodrigo - Analyst
- Lovell Sarreal - Analyst
- Katherine Tan - Analyst
Top Idea: Consumer Sector - PIP
- Company: Pepsi-Cola Products Philippines Inc (PIP)
- Rating: HOLD (from Buy)
- Target Price: PHP4.60 (down 10% from PHP4.35)
- Reason: PIP's operating environment has become tougher due to increased competition and rising sugar costs. The 2H15 entry into snack foods introduces uncertainty. Earnings growth slowed in 2Q15, and the target price reflects lower earnings estimates.
Market Talk
Mining
- MARC posted a PHP165m net loss in 1H15, reversing from PHP146m profits in 1H14.
- Revenues rose 6.1% to PHP697m, but only 11% of the full-year forecast.
- The average realized nickel ore price dropped 53% YoY to USD11.25/WMT.
- Operating expenses increased 55% YoY to PHP185m due to higher salaries and director's fees.
- In 2Q15, revenues jumped 33% to PHP545m, but net loss reached PHP102m, reversing from 2Q14's PHP95m net income.
Telcos
- Telco firms will comply with new NTC rules on Internet speed measurement.
- Providers must set data caps and inform subscribers when reaching 80%, 85%, 90%, and 95% of the limit.
Oil
- PCOR plans to shut down its Port Dickson refinery in Malaysia for 40 days in late September.
- This coincides with maintenance by Petronas at its Melaka refinery.
- PCOR entered the spot market to secure oil products for Sep and Oct, likely for stockpiling ahead of maintenance.
Conglomerates
- SMC Global Power raised USD300m via perpetual subordinated capital bonds.
- The majority of the deal (87%) was allocated to Asia, with 13% to Europe.
Utilities
- TransCo is set to file for a higher FIT-All of PHP0.0826/kWh.
- This is double the current PHP0.0406/kWh and aims to replenish working capital and cover cost adjustments.
PIP Financials
1H15 Performance
- Net Income: PHP560m (up 16.6% YoY)
- Net Sales: PHP13.64b (up 9% YoY)
- Gross Profit: PHP3.41b (up 9.6% YoY)
- EBIT: PHP799m (up 18% YoY)
2Q15 Performance
- Net Income: PHP368m (up 6.9% YoY)
- Net Sales: PHP7.38b (up 5.1% YoY)
- Gross Profit: PHP1.83b (up 0.7% YoY)
- EBIT: PHP504m (up 3% YoY)
Key Financial Metrics (FYE 31 Dec)
| Metric |
FY14A (PHPm) |
FY15E (PHPm) |
FY16E (PHPm) |
| Revenue |
22,462.3 |
27,497.0 |
30,564.3 |
| EBITDA |
2,844.4 |
3,545.8 |
4,100.6 |
| Core Net Profit |
903.5 |
904.8 |
995.9 |
| Core EPS (PHP) |
0.24 |
0.24 |
0.27 |
| Core EPS Growth (%) |
6.5 |
11.6 |
10.1 |
| Net DPS (PHP) |
0.07 |
0.07 |
0.07 |
| Core P/E (x) |
18.6 |
18.6 |
16.9 |
| P/BV (x) |
2.3 |
1.9 |
1.6 |
| Net Dividend Yield (%) |
1.5 |
1.5 |
1.6 |
| ROAE (%) |
13.0 |
10.9 |
11.1 |
| ROAA (%) |
6.3 |
4.6 |
4.5 |
| EV/EBITDA (x) |
6.6 |
5.9 |
5.2 |
| Net Debt/Equity (%) |
29.8 |
47.9 |
42.3 |
PIP Financial Highlights (1H14 vs 1H15)
| Metric |
1H14 (PHPm) |
1H15 (PHPm) |
% Change YoY |
| Gross Sales |
14,725 |
16,027 |
8.8% |
| Carbonated Soft Drinks |
10,907 |
11,888 |
9.0% |
| Non-Carbonated Beverages |
3,818 |
4,139 |
8.4% |
| Sales Discounts & Returns |
-2,215 |
-2,387 |
7.8% |
| Net Sales |
12,510 |
13,640 |
9.0% |
| Gross Profit |
3,112 |
3,411 |
9.6% |
| Operating Expenses |
-2,435 |
-2,612 |
7.2% |
| Net Income |
480 |
560 |
16.6% |
PIP Financial Highlights (2Q14 vs 2Q15)
| Metric |
2Q14 (PHPm) |
2Q15 (PHPm) |
% Change YoY |
| Gross Sales |
8,278 |
8,711 |
5.2% |
| Carbonated Soft Drinks |
6,140 |
6,492 |
5.7% |
| Non-Carbonated Beverages |
2,138 |
2,219 |
3.8% |
| Sales Discounts & Returns |
-1,256 |
-1,331 |
6.0% |
| Net Sales |
7,023 |
7,380 |
5.1% |
| Gross Profit |
1,821 |
1,833 |
0.7% |
| Operating Expenses |
-1,333 |
-1,329 |
-0.3% |
| Net Income |
344 |
368 |
6.9% |
Forecast Change Summary (2015F vs 2016F)
| Metric |
Previous 2015F (PHPm) |
Revised 2015F (PHPm) |
% Change YoY |
Previous 2016F (PHPm) |
Revised 2016F (PHPm) |
% Change YoY |
| Net Sales |
28,420 |
27,497 |
-3.2% |
32,455 |
30,564 |
-5.8% |
| Cost of Goods Sold |
-21,181 |
-20,755 |
-2.0% |
-24,192 |
-23,242 |
-3.9% |
| Gross Profit |
7,239 |
6,742 |
-6.9% |
8,263 |
7,323 |
-11.4% |
| Operating Expenses |
-5,907 |
-5,509 |
-6.7% |
-6,717 |
-5,940 |
-11.6% |
| Net Income |
937 |
905 |
-3.4% |
1,072 |
996 |
-7.1% |
The Week Ahead
- Aug 26: Double Dragon Properties Corp
- Aug 28: Vista Land and Lifescapes, Inc
- Sept 4: Federal Resources Investment Group, Inc, Acesite (Philippines) Hotel Corporation
- Sept 10: IRC Properties, Inc, Mabuhay Holdings Corporation
- Annual Stockholders' Meeting: Multiple companies
Summary of Earnings and Valuations
The report includes an earnings and valuations table with data for multiple stocks, including banks, consumer, and property companies, highlighting their target prices, upside potential, and financial growth metrics. The table includes key indicators like EPS growth, P/E, DPS, and ROE for various companies such as BDO, BPI, CHIB, and others.
