20140513-Maybank_KERPL-Daily_Edge_15页_420kb

报告摘要

Daily Edge Summary - 13 May 2014

Core Content Overview

This document is a financial report from Maybank ATR Kim Eng, dated 13 May 2014, covering market insights and analyst views on various sectors and stocks in the Philippine market. It includes key financial data, market performance, and investment recommendations for several companies.

Main Points

1. Consumer Sector: Universal Robina Corp (URC)

Performance: URC reported robust 1H14 growth, with sales up 13.5% YoY to PHP45.7b and EBIT up 42% YoY to PHP7b due to margin improvements.
Earnings: Net income rose 14% YoY to PHP6.16b, with adjusted net income (excluding forex, mark-to-market, and one-time items) up 29.6% to PHP5.85b.
Segments: Branded consumer foods group (BCFG) led the growth, contributing 83% of total sales, with Philippine sales up 25% YoY and international sales up 9.9% YoY.
Recommendation: Reiterate BUY with a revised DCF-based target price of PHP176, up 10% from previous estimates.
Reasoning: Management raised full-year EBIT guidance to PHP13b, and BCFG's margin improvements are expected to continue.

2. Gaming Sector

Corporate Tax Resolution: PAGCOR reduced license fees by 10 ppts of gross gaming revenue (GGR) to offset the 30% corporate tax increase effective 1 Apr 2014.
Impact: Short-term impact is minimal, but long-term benefits may arise as business expansion expenses become tax deductible.
Recommendation: Maintain BUY on RWM and HOLD on BLOOM.
Target Prices: RWM at PHP12.74, BLOOM at PHP10.46.
Valuation: Philippine casinos are positioned to offer higher junket commission/rebate rates due to lower VIP tax rates, making them competitive in the region.

3. Utilities Sector: Aboitiz Power Corp (AP)

Performance: 1Q14 earnings dropped 3% YoY to PHP4.39b as power generation and distribution profits declined.
Costs: Higher costs offset revenue growth, with power generation profits down 2% to PHP3.79b and distribution profits down 17% to PHP318m.
Revenue Growth: Top line increased with energy volume sales up 10% and ancillary revenues up 17%.
Recommendation: Maintain HOLD with a target price of PHP37.75.
Reasoning: Earnings decline may persist for the rest of the year due to continued cost pressures and the expiry of tax holidays.

4. Conglomerate Sector: Aboitiz Equity Ventures Inc (AEV)

Performance: AEV's core earnings dropped 20% YoY to PHP4.40b due to underperformance from major units AP and UBP.
Segment Contributions: AP's earnings fell 3% and UBP's earnings declined 59% YoY.
Positive Factors: Food subsidiary Pilmico Foods Corp reported a 4% increase in income, with improved performance in the flour and farms divisions.
Recommendation: Maintain SELL with a target price of PHP49.60.
Reasoning: Near-term prospects are weak, and the stock is trading above the estimated target price. Real-time NAV is at PHP49.12.

5. Telecom Sector

Globe Telecom (GLO): 1Q14 core earnings rose 9% YoY to PHP3.36b, with service revenues up 9% to PHP23.23b. EBITDA remained steady at PHP8.80b due to higher subsidies and lower depreciation charges.
Recommendation: Maintain HOLD with a target price of PHP1,582.
Future Outlook: More details on results will be provided after the analysts’ briefing.
Philippine Long Distance Telephone Co (TEL): TEL plans to appeal the NTC ruling on SMS rate refunds to the Court of Appeals. The refund is estimated at PHP7b, which will be given to prepaid subscribers as load credits and postpaid subscribers as bill rebates.
Reasoning: The manner and basis of the refund calculation are still pending, but the long-term impact may be positive.

Key Information

Financial Highlights

URC:
- 1H14 Net Sales: PHP45.7b (+13.5% YoY)
- 1H14 EBIT: PHP7b (+42% YoY)
- 1H14 Net Income: PHP6.16b (+14% YoY)
- Adjusted Net Income: PHP5.85b (+29.6% YoY)
AP:
- 1Q14 Core Earnings: PHP4.39b (-3% YoY)
- Power Generation Profits: PHP3.79b (-2% YoY)
- Power Distribution Profits: PHP318m (-17% YoY)
AEV:
- 1Q14 Core Net Income: PHP4.40b (-20% YoY)
- AP's Earnings: PHP3.38b (-3% YoY)
- UBP's Earnings: PHP731m (-59% YoY)

Investment Recommendations

Company	Recommendation	Target Price (PHP)	Upside (%)
URC	BUY	176	10%
RWM	BUY	12.74	-
BLOOM	HOLD	10.46	-
AP	HOLD	37.75	-
AEV	SELL	49.60	-
GLO	HOLD	1,582	-
TEL	HOLD	-	-

Market Outlook

URC is expected to maintain strong performance in the second half of the year, driven by continued margin improvements.
AP may face continued earnings pressure due to higher costs and the expiry of tax holidays.
AEV is expected to remain underperforming in the short term due to lower contributions from its major units.
GLO is performing in line with expectations, with growth in mobile voice and data revenues.
TEL may benefit from the SMS refund policy in the long run.

Upcoming Events

13 May: Puregold Price Club, Inc., Ayala Corporation, Globe Telecom, Inc.
14 May: ABS-CBN Corporation, International Container Terminal Services, Inc., Megaworld Corporation, Vista Land & Landscapes
15 May: Grand Plaza Hotel Corporation, Seafront Resources Corporation

Summary Table

Sector	Company	Recommendation	Target Price (PHP)	Notes
Consumer	URC	BUY	176	Strong growth and margin improvement
Gaming	RWM	BUY	12.74	Reduced license fees, expansion plans
Gaming	BLOOM	HOLD	10.46	Neutral due to risks
Utilities	AP	HOLD	37.75	Higher costs offset revenue growth
Conglomerate	AEV	SELL	49.60	Underperforming units
Telecom	GLO	HOLD	1,582	Earnings in line with expectations
Telecom	TEL	HOLD	-	SMS refund appeal pending

Valuation Metrics

URC

Core EPS (PHP): 5.10 (FY14E), 5.87 (FY15E)
Core P/E (x): 29.4 (FY14E), 25.6 (FY15E)
Net Dividend Yield (%): 2.1 (FY14E), 1.7 (FY15E)
ROAE (%): 21.0 (FY14E), 21.7 (FY15E)
ROAA (%): 16.2 (FY14E), 17.0 (FY15E)

AP

Core EPS (PHP): 3.36 (FY14E), 3.69 (FY15E)
Core P/E (x): 15.5 (FY14E), 14.0 (FY15E)
Net Dividend Yield (%): 3.2 (FY14E), 3.2 (FY15E)
ROAE (%): 14.1 (FY14E), 14.2 (FY15E)
ROAA (%): 7.6 (FY14E), 7.5 (FY15E)

AEV

Core EPS (PHP): 3.36 (FY14E), 3.69 (FY15E)
Core P/E (x): 16.8 (FY14E), 15.3 (FY15E)
Net Dividend Yield (%): 3.2 (FY14E), 3.2 (FY15E)
ROAE (%): 14.1 (FY14E), 14.2 (FY15E)
ROAA (%): 7.6 (FY14E), 7.5 (FY15E)

Conclusion

The report highlights the performance of key sectors and stocks in the Philippine market. URC is a strong performer with robust growth and margin improvements, leading to a BUY recommendation. The gaming sector benefits from tax adjustments, which may provide long-term advantages. AP and AEV face challenges due to higher costs and underperformance, respectively, leading to HOLD and SELL ratings. GLO remains stable with a HOLD recommendation. The document also outlines upcoming events and provides valuation metrics for key companies.

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