20140507-Maybank_KERPL-Daily_Edge_13页_337kb

Daily Edge Summary - 7 May 2014

Core Content

The document provides a detailed financial analysis of various companies in the Philippine market, focusing on their performance in Q1 2014 and future outlook. It includes barometer data, analyst views, market talks, and key financial figures for specific companies.

Key Information

Barometers

• PSEi: 6,765.93 (0.01% change)
• Turnover (PHPm): 5,360.46 (11.63% change)
• PLDT ADR (USD): 64.65 (0.14% change)
• PLDT ADR (PHP): 2,865.29 (-0.04% change)
• Ave interbank rate: 2.00 (0 bps change)
• PHP/USD rate: 44.36 (0.13% change)

Analysts

• Luz Lorenzo (Head of Research / Economist)
• Laura Dy-Liacco
• Rommel Rodrigo
• Lovell Sarreal
• Katherine Tan
• Ramon Adviento

Market Talk

Property

• ALI (PHP30.90): Sustained earnings growth
  • Recommendation: BUY
  • Target Price (TP): PHP37.80
  • Earnings Growth: 25.4% YoY to PHP3.5b
  • Key Drivers: Property development, especially residential
  • New Strategy: Expected to be announced in H2 14, likely to continue the success of the 5-10-15 business plan
  • New Projects: Fairview Terraces (Q1 14), Solenad (Nuvali development)

Media

• GMA7/GMAP (PHP7.79): Lower ad revenues hit earnings
  • Recommendation: SELL
  • Target Price (TP): PHP7.00
  • Earnings Decline: 46% YoY to PHP325m
  • Revenue Drop: 12% to PHP2.85b due to lower regular ads and absence of election-related ads
  • TV Ratings: GMAP lost lead to ABS-CBN Corp
  • Future Outlook: Expected to improve TV ratings and ad revenues in succeeding quarters

Telecoms

• TEL (BUY): 1Q14 core earnings up 2% YoY to PHP9.76b
  • Revenue: PHP41.22b (3% growth)
  • Non-SMS Data: Up 22%
  • Cellular Voice: Up 6%
  • Subscribers: 70.49m (450k net increase)
  • Broadband: 3.55m subscribers (136k increase from end-2013)

Utilities

• MWC (HOLD): 1Q14 net profits up 7% to PHP1.43b

  • Core Income: 24.1% of full-year estimate
  • Depreciation: Declined 4% to PHP594m
  • East Zone Contribution: ~90% of consolidated earnings

• AP (HOLD): Core income down 3% YoY to PHP4.4b

  • Power Generation: Down 3% to PHP3.8b
  • Power Distribution: Down 17% to PHP618m
  • Reasons: Lower profits from Tiwi-Makban and Pagbilao, higher operating costs

Energy

• PCOR (BUY): 1Q14 net income reaches PHP2.23b
  • Full-Year Forecast: 28.6% of PHP7.81b
  • Revenue Growth: 12% to PHP125.2b
  • Volume Sales: Up 4% to 20.7m barrels
  • Challenges: Refinery shutdown in February to mid-March

Mining

• NIKL (BUY): 1Q14 net income surged 492% YoY to PHP593.7m
  • Core Income: Up 77% to PHP177.1m
  • Production Volume: Up 52% to 2.65m WMT
  • Reasons: Product sales to new THPAL, revaluation of equity interest

Oil & Gas / Utilities

• Otto Energy Ltd: Disclosed updates on service contracts 55 and 51
  • SC 55: Extended by 14 months due to delay in Strategic Environmental Plan clearance
  • SC 51: Withdrawn due to drilling safety concerns
  • Trans-Asia Oil and Energy Development Corp (TA - BUY): Participating interests in SC 55 and SC 51

Banks

• PBB (BUY): Declared a 25% stock dividend and PHP1/sh cash dividends for preferred stockholders
  • Impact: 2014F net income to common shareholders lower by ~7% to PHP861m
• Philippine Business Bank (PBB - BUY): Stock price rose to PHP24.75, TP at PHP29.00

Key Data for ALI

• 1Q14 Revenue: PHP22.7b (25.4% YoY growth)
• Residential Revenue: PHP11b (37.5% YoY growth)
• Core Net Profit: PHP15.1b (23% of FY2014 estimate)
• Core EPS (PHP): 1.08
• Core EPS Growth (%): 28.9
• Core P/E (X): 28.6
• Net Dividend Yield (%): 1.0
• ROE (%): 19.7
• ROA (%): 13.0

Key Data for GMA7/GMAP

• 1Q14 Net Profit to Common: PHP325m (18% of full-year forecast)
• EPS (PHP): 0.36
• EPS Growth (%): 4.6
• PER: 21.7
• Div Yield (%): 3.3
• ROE (%): 19.7
• ROA (%): 12.7

Market Highlights

• ALI (PHP30.90): Sustained earnings growth
• GMA7/GMAP (PHP7.79): Lower ad revenues hit earnings

The Week Ahead

• 7 May: Events include briefings and meetings for various companies
• 8 May: Continued focus on financial updates and strategic discussions

Summary of Key Recommendations

• ALI: BUY
• GMA7/GMAP: SELL
• TEL: BUY
• MWC: HOLD
• AP: HOLD
• PCOR: BUY
• NIKL: BUY
• TA: BUY
• PBB: BUY

Summary of Key Financial Trends

• ALI: Strong revenue growth across segments, especially residential
• GMA7/GMAP: Disappointing Q1 results due to lower ad revenues and TV ratings
• TEL: Mixed results with core earnings up but revenue slightly below expectations
• MWC: Better than expected results with net profits up 7%
• PCOR: Strong results despite flat YoY, with revenue growth of 12%
• NIKL: Surprising results with net income up 492% YoY
• PBB: Positive stock dividend and cash dividends

Summary of Key Metrics

• ALI: Revenue growth of 22.77% YoY, core net profit growth of 28.9%
• GMA7/GMAP: Revenue down 12% YoY, core net profit down 45.9%
• TEL: Core income up 2% YoY, revenue up 3%
• MWC: Net profit up 7%, EBITDA up 4%
• PCOR: Net profit up to PHP2.23b, revenue up 12%
• NIKL: Net profit up 492%, core income up 77%
• PBB: Stock price up to PHP24.75, TP at PHP29.00

Conclusion

The report highlights the mixed performance of various sectors in Q1 2014, with some companies like ALI and PCOR showing strong growth, while others like GMA7/GMAP and AEV face challenges. The analysts maintain their BUY and SELL ratings based on the companies' earnings trends, future projections, and strategic moves. The report also includes key financial metrics and upcoming events for the week.