FY14 shipment revenues lag estimates

WEDNESDAY, 21 JANUARY 2015
STOCKS IN FOCUS:
FGEN: Raises Php7.5Bil from private placement at Php25.25/sh
FGEN disclosed that it has raised Php7.5Bil in proceeds from the sale of 297Mil common shares
at Php25.25/sh via private placement. The selling price represents a 2.9% discount to FGEN’s
closing price of Php26/sh on Tuesday. Broken down, FGEN sold 17.6Mil unissued common
shares and 179.1Mil treasury shares to its parent company First Philippine Holdings (FPH). The
remaining 100.3Mil shares taken from FGEN’s treasury stock were sold to other investors. The
shares sold represent 8.8% of FGEN’s total outstanding shares prior to the transaction. Following
the transaction, FPH will maintain its 66.2% stake in FGEN. Proceeds from the placement will be
used by FGEN for power projects and general corporate purposes. We currently have a BUY rating
on FGEN with a FV estimate of Php36.50/sh. (source: FGEN)
(As of January 20, 2015)
INDICES
INDICES
PSEi
All Shares
Financials
Holding Firms
Industrial
Mining & Oil
Property
Services
Dow Jones
S&P 500
Nasdaq
Index decliners led gainers 18 to 10 while 2 issues closed unchanged. All sectors closed lower last
session, led by Mining & Oil (-2.91%). Significant decliners were LTG (-3.34%), DMC (-2.36%),
AGI (-2.29%), SCC (-2.04%), and BPI (-1.86%). Meanwhile, notable gainers were MPI (+3.60%),
GTCAP (+1.68%), and BLOOM (+1.32%).
Value turnover increased to Php10.1 Bil from Php8.1 Bil the previous session. Foreigners were net
sellers, with net selling amounting to Php270 Mil.
3.7
3.1
20.5
0.02
0.15
0.44
5.66
9.42
11.45
INDEX GAINERS
Ticker Company
MPI
Metro Pacific Inv Corp
GTCAP GT Capital Hldgs Inc
BLOOM Bloomberry Resorts
BDO BDO Unibank Inc
GLO Globe Telecom Inc
Price
5.18
1149.00
12.30
111.50
1740.00
%
3.60
1.68
1.32
1.18
0.87
INDEX LOSERS
MARKET SUMMARY:
The PSEi continued to decline as investors continued to profit-take given the lack of new leads.
The main index lost 32.51 points or 0.43% to close at 7,452.81.
17,515.2
2,022.6
4,654.8
YTD%
26.54
20.80
20.10
21.43
39.86
37.75
32.59
15.06
INDEX GAINERS
OTHER NEWS:
HOUSE: Forecasts Php1.1Bil in sales from General Santos mass housing project
PXP: Pitkin to lose stake in West Linapacan oil field
DMPL: Secures SEC and PSE approval for rights offer
Economy: BOP a deficit for 2014 but showing improvement
Economy: IMF cuts 2014 growth forecast but raises 2015 projection
Economy: DoTC to declare failed bidding for MRT-3 maintenance contract
Economy: CAAP upgrades air traffic management system
Close Points
%
7,452.81 -32.51 -0.43
4,366.13 -18.48 -0.42
1,715.02
-5.55 -0.32
6,593.04 -26.00 -0.39
12,154.40 -40.27 -0.33
16,416.56 -492.31 -2.91
2,924.31
-1.37 -0.05
2,147.08 -11.29 -0.52
INDEX LOSERS
Ticker
LTG
DMC
AGI
SCC
BPI
Company
LT Group Inc
DMCI Hldgs Inc
Alliance Global Inc
Semirara Mining
Bank of Phil Islands
Price
13.30
14.90
23.45
144.00
92.25
%
-3.34
-2.36
-2.29
-2.04
-1.86
TOP 5 MOST ACTIVE STOCKS
TOP 5 MOST ACTIVE STOCKS
Ticker
MBT
ALI
TEL
BDO
SMPH
Company
Metrobank
Ayala Land Inc
Phil Long Distance Co
BDO Unibank Inc
SM Prime Hldgs Inc
Turnover
788,970,400
710,286,800
634,494,700
484,920,700
406,020,500
PHILIPPINE EQUITY RESEARCH
STOCKS IN FOCUS:
FGEN: Raises Php7.5Bil from private placement at Php25.25/sh
FGEN disclosed that it has raised Php7.5Bil in proceeds from the sale of 297Mil common shares at
Php25.25/sh via private placement. The selling price represents a 2.9% discount to FGEN’s closing
price of Php26/sh on Tuesday. Broken down, FGEN sold 17.6Mil unissued common shares and
179.1Mil treasury shares to its parent company First Philippine Holdings (FPH). The remaining
100.3Mil shares taken from FGEN’s treasury stock were sold to other investors. The shares sold
represent 8.8% of FGEN’s total outstanding shares prior to the transaction. Following the transaction,
FPH will maintain its 66.2% stake in FGEN. Proceeds from the placement will be used by FGEN for
power projects and general corporate purposes. We currently have a BUY rating on FGEN with a FV
estimate of Php36.50/sh. (source: FGEN)
George Ching
Ticker: FGEN
Rating: BUY
Target Price: Php36.50
OTHER NEWS:
HOUSE: Forecasts Php1.1Bil in sales from General Santos mass housing project
8990 Holdings, Inc. (HOUSE) said that it is looking at Php1.1Bil in potential sales from its second
project in Mindanao. The company is spending Php400Mil to build Deca Homes Gensan Bayview, a
19-hectare mass housing project in General Santos City. The project will have a total of 1,271 house
and lot units with sizes of 80 to 150 sqm each. The units are priced at Php450,000 to Php750,000
each. Construction will start within the first quarter and around 500 units are expected to be turned
over to buyers within this year. (source: BusinessWorld)
Jed Frederick Pilarca
Garie Ouano
Meredith Hazel Cua
PXP: Pitkin to lose stake in West Linapacan oil field
Pitkin Petroleum Plc, a 50.3%-owned subsidiary of PXP, is set to lose it s 58.3% stake in the West
Linapacan oil field project (Service Contract 14C2) due to its failure to comply with the farm-in
agreement with the project’s other stakeholders. In particular, Pitkin failed to complete phase 2 of
the program after several extensions already. Pitkin’s stake in the project will be reassigned to the
project’s other stakeholders, namely, Philodrill Corp., Cosco Capital, Inc., Forum Energy Philippines
Corp., Oriental Petroleum & Minerals Corp., Linapacan Oil & Gas Power Corp., and PetroEnergy
Resources Corp. The reassignment of Pitkin’s interest is subject to the approval of the Department
of Energy. (source: BusinessWorld)
DMPL: Secures SEC and PSE approval for rights offer
DMPL disclosed that it has obtained approval from the SEC and PSE for its planned stock rights
offering. Based on an earlier disclosure, DMPL plans to raise US$180Mil from the offer of up to
US$641.9Mil new shares. The company will use the proceeds from the offer to repay its US$165Mil
bridge loan used to finance the acquisition of the US food business. (source: DMPL)
Economy: BOP a deficit for 2014 but showing improvement
The BSP reported that the country’s balance of payments (BOP) stood at a US$2.88Bil deficit in
2014, turning around from a surplus in 2013 but lower than the US$3.40Bil deficit expected by the
BSP. According to the BSP, large outflows in foreign portfolio investments and residents’ investments
abroad driven by the impending tightening of US monetary policy resulted in the deficit. For December
alone, however, the country posted a US$843Mil surplus, an improvement from the US$314Mil deficit
in November. The BSP attributed the December surplus to the country’s strong macrofundamentals.
WEDNESDAY, 17 DECEMBER 2014
(source: BSP)
WEDNESDAY, 21 JANUARY 2015
page 2
PHILIPPINE EQUITY RESEARCH
Economy: IMF cuts 2014 growth forecast but raises 2015 projection
The IMF reduced its Philippine economic growth estimate for 2014 due to slow government spending
and weak agricultural output. The 2014 growth forecast was reduced to 5.8% from 6.2%. However,
the IMF forecasts that the Philippines will continue to outpace regional and global growth. For 2015,
the IMF’s Philippine GDP growth forecast was raised to 6.6% from 6.3% with lower global oil prices
and an anticipated pick up in government spending expected to boost growth. (source: BusinessWorld)
Economy: DoTC to declare failed bidding for MRT-3 maintenance contract
According to Transportation Secretary Joseph Abaya, the bids committee will have to declare a failed
bidding for the second time after finding no takers for the Php2.4Bil MRT-3 thee-year maintenance
contract. The government offered to pay as much as Php800Mil a year with a promise to impose
less harsh fines for train glitches. Previously, there should be 20 and 15 trains running during peak
and off-peak hours respectively. Investors initially had apprehensions, prompting the department to
relax the rules and penalize them only when trains drop below 12 during peak and off-peak hours.
In addition, the penalty before was on an hourly basis but was amended to once every five hours.
Despite the sweeter deal, no one procured documents and consequently, no bids were submitted.
Currently, the government pays APT Global Php57Mil a month or Php684Mil a year as an interim
contractor. They will continue to be in charge of the rail system’s upkeep until the government awards
the contract to a new service provider. (source: BusinessWorld)
Economy: CAAP upgrades air traffic management system
The Civil Aviation Authority of the Philippines (CAAP) has inaugurated upgrades to its Eurocat air traffic
management system, which has been in operation since 1996. The project was done in partnership
with Thales Australia and Pacific Hemisphere Development for a total cost of Php159.9Mil. The
system controls en route, overflight, arriving and departing air traffic over a radius of up to 250
nautical miles. Prior to the upgrade, flights at NAIA especially during the rainy season were affected
by continued outages, resulting in flight disruptions.
According to CAAP, the improvement is a critical component of the Php13Bil next-generation satellitebased communications, navigation, surveillance/air traffic management (CNS/ATM) project that was
signed during the previous administration. The CNS/ATM records the exact position of aircraft by
using transponders and satellites which can boost the capacity of air routes and airports. In addition.
The technology includes a computer-based flight data processing system that will enable aircraft
operators to meet their planned times of departure and arrival without compromising agreed levels of
safety. The International Civil Aviation Organization has given the Philippines until next year to adopt
the satellite-based CNS/ATM. (source: BusinessWorld)
WEDNESDAY, 21 JANUARY 2015
page 3
PHILIPPINE EQUITY RESEARCH
Calendar of Key Events
JANUARY
MON
TUES
WED
THURS
FRI
SAT
29
30
31
1
2
3
HOLIDAY
HOLIDAY
5
6
7
PSB: Ex-date Php0.75
Cash Dividend
PGOLD: Ex-date
Php0.30 Cash Dividend
COSCO: Ex-date
Php0.08 Cash Dividend
8
9
GTCAP: Annual
Shareholders Meeting
10
12
RCI: Ex-date Php0.02
Cash Dividend
13
14
15
16
17
SPECIAL NONWORKING HOLIDAY
SPECIAL NONWORKING HOLIDAY
19
20
21
22
23
NOW: Annual
Shareholders Meeting
24
27
28
29
30
31
SPECIAL NONWORKING HOLIDAY
26
WEDNESDAY, 17 DECEMBER 2014
WEDNESDAY, 21 JANUARY 2015
page 4
PHILIPPINE EQUITY RESEARCH
Investment Rating Definitions
BUY
HOLD
SELL
Stocks that have a BUY rating have attractive
fundamentals and valuations, based on
our analysis. We expect the share price
to outperform the market in the next six to
twelve months.
Stocks that have a HOLD rating have either
1.) attractive fundamentals but expensive
valuations; 2.) attractive valuations but
near term earnings outlook might be poor
or vulnerable to numerous risks. Given the
said factors, the share price of the stock may
perform merely inline or underperform the
market in the next six to twelve months.
We dislike both the valuations and
fundamentals of stocks with a SELL rating.
We expect the share price to underperform in
the next six to twelve months.
Important Disclaimers
Securities recommended, offered or sold by COL Financial Group, Inc.are subject to investment risks, including the possible loss of the principal amount
invested. Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and it may
be incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are
subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a
security. COL Financial ans/or its employees not involved in the preparation of this report may have investments in securities or derivatives of securities of
securities of the companies mentioned in this report, and may trade them in ways different from those discussed in this report.
2401-B East Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas Center, Pasig City 1605 Philippines
Tel: +632 636-5411
WEDNESDAY, 21 JANUARY 2015
Fax: +632 635-4632
Website: http://www.colfinancial.com
page 5