20140320-Maybank_KERPL-Daily_Edge_12页_404kb

Daily Edge Summary - 20 March 2014

Core Content

This document is a financial report dated 20 March 2014, focusing on the stock market performance and analyst views of several companies in the Philippines. It includes barometer data, analyst contacts, market insights, and specific ratings for companies such as AEV, AP, and CIC, along with a detailed table of earnings and valuations for multiple stocks across different sectors.

Key Sectors and Companies

Conglomerates

• AEV (PHP60.20):

  • Downgraded to SELL from HOLD.
  • Current price is above the revised NAV of PHP49.60 and real-time NAV of PHP51.86.
  • Valuation at 2.85x PBR, which is higher than the peer average of 2.01x.
  • Major operating units include Aboitiz Power Corp (AP) and Union Bank of the Philippines (UBP), which account for 92% of the conglomerate's NAV.
  • 2014F profit forecast at PHP18.53b, a 9.4% decline YoY.
  • Target price adjusted to PHP49.60.

• AP (PHP39.90):

  • Maintained as HOLD.
  • 2013 core profits were in line with expectations, with a decline of 15% YoY to PHP20.12b.
  • Target price adjusted to PHP37.75, equivalent to 15.8x 2014F earnings.
  • 2014F profit forecast at PHP18.53b, with an expected 11% decline.
  • Share price has risen 17.35% YTD, outperforming the market.
  • Declared a PHP1.66 cash dividend, giving a 4.1% yield.

• MPI (Under Review):

  • FY2013 net profit up 22% YoY to PHP7.2b.
  • Operating income grew 9%, driven by increased billed volume, effective tariff increase, and improved non-revenue water.
  • EPS rose 4% to PHP0.278, lower than consensus.
  • Dividend per share increased by 16% to PHP0.037.

• CIC:

  • Acquired a majority stake in Otis Philippines, declared a cash dividend of PHP0.59/sh.
  • Dividend yield of 2.2% based on yesterday's closing price.

Utilities

• AP (Still Fully Valued):

  • 2013 results aligned with expectations.
  • Core earnings declined 15% YoY to PHP20.12b.
  • 2014F profit forecast at PHP18.53b.
  • Expected return to growth in 2015 with PHP19.49b in profits.
  • Dividend yield of 4.1%.

• FGEN:

  • 2013 reported net income of USD118.1m, a 38% decline YoY.
  • Recurring net income of USD154.6m, which exceeded the estimate of USD122m.
  • EDC, a 50% owned subsidiary, reported recurring earnings that exceeded the 2013 target by 22%.
  • Earnings declined due to damages from Typhoon Haiyan, reduced sales, and lower gas plant earnings.
  • EDC's geothermal assets contributed PHP46.6m, up from PHP81.5m.

• SCC:

  • Affected by the repricing of WESM prices in Nov-Dec 2013.
  • Financial statements of its subsidiary SEM-Calaca Power Corp were impacted.
  • Effects on audited financial statements are uncertain.

Market Talk and Highlights

• AP:

  • Still fully valued, with a HOLD rating.
  • 2013 core profits in line with expectations.
  • 2014F profit forecast of PHP19.49b.
  • Expected to return to growth in 2015 due to new plant operations.

• CIC:

  • Acquired majority of Otis Philippines.
  • Declared a cash dividend of PHP0.59/sh, with a yield of 2.2%.

• MPI:

  • 2013 profits up 22% YoY to PHP7.2b.
  • EPS up 4% to PHP0.278.
  • Dividend per share increased by 16% to PHP0.037.

Earnings and Valuations Table (As of 19 March 2014)

The Week Ahead

• 21 Mar: Travellers International Hotel Group, Inc. Analyst and Investors' Briefing
• 24 Mar: Trans-Asia Oil and Energy Development Annual Stockholders' Meeting
• 31 Mar: Col Financial Group, Inc. Annual Stockholders' Meeting

Summary of Key Points

• AEV is downgraded to SELL due to overvaluation.
• AP is maintained at HOLD, with a target price adjusted to PHP37.75.
• CIC acquires majority of Otis Philippines and declares a cash dividend.
• MPI reports 22% growth in 2013 profits and increased dividend per share.
• FGEN and EDC show mixed results, with FGEN's recurring earnings exceeding expectations.
• The report includes a detailed earnings and valuations table for multiple stocks across different sectors.
• Upcoming events include investor briefings and stockholder meetings.