20140410-Maybank_KERPL-Daily_Edge_11页_394kb

Daily Edge Summary - 10 April 2014

Core Content

This report provides an overview of stock market performance and analyst views on various sectors in the Philippines, focusing on the consumer and property sectors. It includes financial data for several companies, key market developments, and analyst recommendations.

Main Points

Market Overview

• PSEi: Closed at 6,587.49, showing a slight decrease of 0.41%.
• Turnover: Increased to PHP7,231.68 million, with a 4.03% rise.
• PLDT ADR (USD): Closed at 61.36, with a 0.32% decrease.
• PLDT ADR (PHP): Closed at 2,744.94, with a 0.56% decrease.
• Ave interbank rate: Remained at 2.00%.
• PHP/USD rate: Increased slightly to 44.83, with a 0.07% rise.

Analysts

• The report is authored by Maybank ATR Kim Eng analysts, including Luz Lorenzo, Laura Dy-Liacco, Rommel Rodrigo, Lovell Sarreal, and Katherine Tan.
• Analyst contact details are provided for each.

Top Idea: Consumer Sector

• San Miguel Pure Foods Co Inc (PF): The company reported a 2% YoY decrease in net income to PHP4.1 billion, slightly below the forecast of PHP4.3 billion. Excluding preferred share dividends, net income to common shareholders was PHP2.9 billion.
• Key Performance Metrics:
  • Consolidated revenues grew by 4.2% to PHP99.8 billion.
  • Operating income increased by 6.4% to PHP5.5 billion.
  • Gross profit rose by 13.2% to PHP20.2 billion, with margin improvement of 160 basis points.
• MTM Losses: The company experienced mark-to-market losses of PHP475 million, primarily due to lower international wheat prices.
• Cash Position: Cash at the end of 2013 increased to PHP7 billion, mainly due to lower working capital requirements.
• Analyst View: The analysts maintain a BUY rating for PF, despite the MTM losses, as the company is valued at about half the 23x consumer sector PE average.
• Target Price: The target price for PF is PHP225.00, with an upside of 38% from the current share price.

Market Talk

Property

• Filinvest Land Inc (FLI): FY2013 net profit grew by 14% YoY to PHP4.0 billion, in line with the forecast.
• Key Drivers: Earnings growth was driven by residential and leasing segments.
• Capex: 2013 capex was PHP10.6 billion, with 33% allocated to land banking.
• 2014 Strategy: Management plans to increase capex to PHP20 billion, focusing on recurring business and project launches of PHP17.5 billion with 22 projects.
• Analyst View: Maintain BUY with a target price of PHP2.20.

Utilities

• Manila Electric Co (MER): Signed an interim power supply agreement (IPSA) with PanAsia Energy for up to 270 MW, effective April to June 2014.
• IPSA Status: The agreement is non-firm and requires final approval from the Energy Regulatory Commission.
• Analyst View: Maintain HOLD.

Telecom

• Globe Telecom Inc (GLO): Approved the issuance of up to PHP10 billion in preferred shares.
• Terms: Not yet provided.
• Analyst View: Maintain HOLD.

Mining

• Philex Mining Corp (PX): Reached an agreement with Benguet towns to settle PHP200 million in tax debts, which could reduce 2014E earnings by 6%.
• Analyst View: Maintain BUY.

The Week Ahead

• 10 Apr: Bank of the Philippine Islands, International Container Terminal Services, Inc., and ABS-CBN Corporation will hold their annual stockholders' meetings.
• 11 Apr: Ayala Corporation and Phinma Corporation will also hold their annual stockholders' meetings.

Earnings and Valuations

Banks

• BDO: Target price PHP88.00, upside 3%, BUY rating.
• BPI: Target price PHP93.50, upside 2%, HOLD rating.
• CHIB: Target price PHP57.75, upside -5%, HOLD rating.
• EW: Target price PHP31.80, upside 10%, BUY rating.
• MBT: Target price PHP88.00, upside 9%, HOLD rating.
• PBB: Target price PHP30.00, upside 33%, BUY rating.
• PNB: Target price PHP111.00, upside 14%, BUY rating.
• RCB: Target price PHP77.50, upside 13%, BUY rating.
• CIC: Target price PHP36.50, upside 14%, BUY rating.
• PGOLD: Target price PHP50.00, upside 11%, BUY rating.

Consumer

• JFC: Target price PHP191.00, upside 9%, BUY rating.
• PIP: Target price PHP6.05, upside 23%, BUY rating.
• RFM: Target price PHP6.65, upside 6%, BUY rating.
• URC: Target price PHP50.00, upside 11%, BUY rating.
• DMPL: Target price PHP30.00, upside 33%, BUY rating.
• RRHI: Target price PHP77.50, upside 13%, BUY rating.
• PF: Target price PHP310.00, upside 38%, BUY rating.

Property

• ALI: Target price PHP37.80, upside 22%, BUY rating.
• FLI: Target price PHP2.20, upside 47%, BUY rating.
• MEG: Target price PHP4.20, upside -4%, HOLD rating.
• RLC: Target price PHP25.66, upside 15%, BUY rating.
• VLL: Target price PHP6.70, upside 14%, BUY rating.

Utilities

• AP: Target price PHP37.75, upside -, HOLD rating.
• EDC: Target price PHP6.90, upside 23%, BUY rating.
• FGEN: Target price PHP20.35, upside 12%, BUY rating.

Key Information

• PF is the main focus of the consumer sector analysis, with a BUY rating and target price of PHP310.00.
• FLI reported a 14% increase in FY2013 net profit, aligning with forecasts.
• MER signed a new IPSA, which could provide additional power supply capacity.
• GLO is set to issue up to PHP10 billion in preferred shares.
• PX is working on a settlement with Benguet towns, which may impact 2014 earnings.
• Market Trends: The report highlights various stockholder meetings and financial performance data across different sectors.

Summary Table

The report emphasizes the performance of key companies, market developments, and analyst recommendations, with a focus on the consumer and property sectors.