PHILIPPINE STOCK MARKET

OUTLOOK & STRATEGY

December 7, 2015
Headwinds ahead, but robust fundamentals can support
post-election rally

RCBC Securities Research

Raul Ruiz
Angelie Wee
Anton Alfonso
Ralph Bodollo

1
Market recap
Philippine market has broken below the uptrend established since 2009.
In October, the index moved farther away from the major resistance line (approximately 7,400).
Market has yet to establish a clear trend.

PSEi since 2009

Philippine market has broken below both the 50-day and 200-day moving averages.

200-day EMA
One-year daily Psei

50-day EMA
4
Ytd Leaders

Bigger-cap & property stocks have done better …

Rank Stock % gain Sector

1 SM Prime Holdings 31.2% Property

2 LT Group 23.6% Holding Firm
3 Filinvest Land 22.9% Property
4 Meralco 22.0% Power & energy
5 Globe Telecom 18.0% Telecom
6 Metro Pacific 15.2% Holding Firm
7 D&L Industries 12.2% Consumer
8 Robinsons Land 11.3% Property
9 Aboitiz Equity 9.2% Holding Firm
10 Ayala Corp 9.1% Holding Firm
Ytd Laggards

… than smaller-caps. Mining & gaming stocks have been battered.

Rank Stock % loss Sector

1 Marcventures -68.2% Mining
2 Nickel Asia -57.8% Mining
3 Bloomberry -56.6% Gaming
4 SSI -55.8% Consumer
5 Travellers -52.0% Gaming
6 PNB -36.0% Banking
7 ICTSI -34.8% Service
8 Philex Mining -34.3% Mining
9 Petron -29.4% Energy
10 PLDT -25.9% Telecoms
Philippine market is still more expensive compared with its historical valuation
and with other markets.

Performance and Valuation of Selected Markets

(Source: Bloomberg, RSEC)

ytd 2016 PE Median PE

% change (x) (since 2001)
(US$ terms)
PSEi -8.5% 18.8* 14.8
New York (DJIA) -0.5% 15.1 17.0
Paris (CAC 40) +0.4% 14.8 13.5
Frankfurt (DAX 30) -0.6% 13.5 15.4
London (FTSE 100) -6.3% 15.2 16.9
Tokyo (Nikkei 225) +10.6% 17.5 38.4
Hong Kong (Hang Seng) -4.7% 10.7 14.5
Jakarta (JCI) -22.1% 14.6 16.6
Thailand SET -18.7% 12.9 12.9
*RSEC estimates. Other indexes based on Bloomberg data.
Economic recap & outlook
 Negative net exports weighed on 9M GDP.
Government was able to contribute to growth.

GDP at Constant 2000 Prices GDP at Constant 2000 Prices

by Expenditure Share by Expenditure Share
(Phpmn) % Change

9M2014 9M2015 9M2014 9M2015

HH Final Consumption 3,544,860 3,755,945 HH Final Consumption 5.6% 6.0%
Government Final Consumption 565,068 611,219 Government Final Consumption -2.6% 8.2%
Capital formation 1,085,480 1,221,013 Capital formation 6.1% 12.5%
Fixed capital 1,116,942 1,222,481 Fixed capital 6.6% 9.4%
Construction 465,025 503,451 Construction 8.5% 8.3%
Public 100,122 111,346 Public 10.2% 11.2%
Private 364,902 392,105 Private 8.0% 7.5%
Durable equipment 552,498 614,801 Durable equipment 5.2% 11.3%
Breeding and orchard dev 67,574 68,456 Breeding and orchard dev -1.9% 1.3%
Intellectual property products 31,846 35,774 Intellectual property 26.1% 12.3%
Changes in inventories (31,461) (1,468) Changes in inventories na na
Total 5,195,408 5,588,177 Exports 11.3% 3.8%
Exports 2,638,810 2,739,560 Exports of goods 11.4% 1.4%
Exports of goods 2,137,467 2,166,572 Exports of services 10.7% 14.3%
Exports of services 501,344 572,987 Imports 7.9% 10.3%
Imports 2,586,154 2,852,670 Imports of goods 7.7% 9.1%
Imports of goods 2,078,760 2,267,476 Imports of services 9.0% 15.3%
Imports of services 507,396 585,194 Net exports na na
Net exports 52,656 (113,110) GDP 5.6% 5.6%
Statistical discrepancy (19,209) 45,897
GDP 5,228,855 5,520,965

9
On the industrial origin side, mining & quarrying & manufacturing slowed, reflecting the weakness
in exports.

GDP at Constant 2000 Prices

Industrial Origin
% change
9M2014 9M2015
Agriculture, hunting, forestry & fishing 0.5% 0.5%
Industry 7.5% 5.7%
Mining & Quarrying 4.7% 3.5%
Manufacturing 8.5% 5.3%
Construction 7.8% 8.3%
Electricity, gas & water 1.5% 4.7%
Services 5.5% 6.4%
Transportation, storage & comm 4.7% 7.3%
Trade & repair 7.3% 6.5%
Financial intermediation 6.7% 5.4%
Real estate, renting & business activity 8.5% 7.0%
Public admin & defense 0.3% 0.9%
Other services 1.6% 7.6%
GDP at Constant 2000 Prices 5.6% 5.6%

10
Inflation has slowed after peaking in July 2014. Barring supply shocks, especially if El Niño
strengthens, 2015 inflation could end up below the central bank’s 2-4% target. Next year, inflation
could trend up because of the low base this year to the mid to high end of the central bank’s 2-4%
target.

Monthly inflation,
January 2014-November 2015
6.0%
4.9% 4.9%
5.0% 4.5% 4.4% 4.4% 4.3%
4.2% 4.1% 4.1%
3.9% 3.7%
4.0%

2.5% 2.7%
3.0% 2.4% 2.4% 2.2%
2.0%
1.6%
1.2% 1.1%
0.8% 0.6%
1.0% 0.4% 0.4%

0.0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2014 2015

11
• The central bank tightened liquidity and credit in 2014, raising policy rates by 50 bps
and the reserve requirement by a cumulative 2 pps in two adjustments.
• Despite this, the upward impact on market interest rates, particularly bank lending
rates, has been moderate.
• With Philippine inflation expected to stay below to within target this year & next, we
expect only modest rate hikes from the BSP.

Historical 91-day T-bill rate and banks' average lending rates, annual 2000 - 2014 & Sept 2015
(% p.a.)
14.00 12.40
12.00 10.86
10.07 10.15 9.71
9.48
10.00 8.90 8.68 8.76 8.54
7.67
8.00 9.86 9.86 6.63
5.65 5.76 5.53 5.76
6.00 7.34
6.03 6.36
4.00 5.43 5.35 5.39
4.19 3.73 1.24 1.51
2.00 3.41 0.32
- 1.37 1.58
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sep-15

91 day Tbill Banks' ave. lending rate

12
Capital formation should pick up going forward primarily because of PPP projects. Of $22.5bn in
PPP projects that have passed feasibility stage, $3.66bn or 18% have been awarded.

PPP projects beyond feasibility study stage

Estimated Cost Project stage
(US$mn)
Daang Hari-SLEX link road 44.37 Awarded in April 2011
Phase 1 of School Infra project 359.38 Awarded in April 2012
NAIA Expressway (Phase II) 342.60 Awarded in May 2013
Phase 2 of School Infra project 85.21 Awarded in Oct. 2013
Modernization of Phil. Orthopedic Center 125.61 Awarded in December 2013
Automatic Fare Collection system 38.00 Awarded in March 2014
Mactan-Cebu International Airport Passenger Terminal 386.76 Awarded in April 2014
LRT Line 1 Cavite Extension & O&M 1,442.20 Awarded in September2014
Cavite-Laguna Expressway 781.90 Awarded in June 2015
Integrated Transport System – Southwest Terminal 55.60 Awarded in April 2015
Integrated Transport System – South Terminal 88.90 For issuance of notice of award
Bulacan Bulk Water Supply 542.20 For bid submission
Laguna Lakeshore Expressway Dike 2,730.00 For bid submission
O&M of LRT Line 2 No capex For bid submission
Regional Prison Facilities 1,115.10 For bid submission
Davao Sasa Port 422.00 For bid submission
Regional airport (Bacolod-Silay and Iloilo) 1,082.50 For bid submission
Regional airport (Davao, Laguindingan, New Bohol) 1,229.40 For bid submission

13
Continuation of PPP projects:
Estimated Cost Project stage
(US$mn)
New Centennial Water Supply Source Project 416.00 Evaluation of pre-qualification documents
New Centennial Water Source- Kaliwa Dam Project 400.00 Evaluation of pre-qualification documents
North-South Railway Project (South Line) 3,647.70 For pre-qualification
Road Transport IT Infrastructure Project (Phase II) 6.40 For pre-qualification
Civil Registration System Information Technology Project (Phase II) 34.00 For pre-qualification
LRT Line 6 Project 1,390.90 For roll out
LRT Line 4 Project 916.50 For roll out
NAIA Development Project 1,593.30 For approval
NLEX-SLEX Connector Road 495.80 For approval
Batangas-Manila 1 Natural Gas Pipeline Project 314.60 For approval
Plaridel Bypass Toll Road 200.70 For approval
Philippine Travel Center Complex Project 37.40 For approval
New Nayong Pilipino at Entertainment City Project 33.80 For approval
Total 20,358.83

Estimated Cost Project stage

(US$mn)
Additional infra projects
Skyway Stage 3 588.52 On-going construction. initiated by the private sector
have also progressed.
MRT Line 7 1,540.00 Construction expected to start in
February 2016.
Total 2,128.52
14
The central bank has allowed the peso to depreciate against the US dollar, but it has enough tools
such as FX reserves (10 months’ of imports) and monetary tools to prevent a sharp depreciation.

Average peso-dollar rate (Php/US$)

Annual 2000-2014 & 11m2015
60.000 56.040 55.086
54.203
50.993 51.604 51.314
46.148 47.637
50.000 44.475 45.110 45.339
44.194 43.313 42.229 42.446 44.394

40.000

30.000

20.000

10.000

0.000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 11m'15

15
Government’s fighting target of 7-8% GDP target for 2014A Interim 2015F1 2016F1
both 2015/2016 won’t be met, but growth would 2015A
still be above-trend at between 5.5-6%. Real GDP growth 6.0 5.4 7-8 7-8
(%)
Inflation (%) 4.2 1.42 2-4 2-4
2015 & 2016 Philippine GDP Forecasts by BSP overnight 4.0 4.0 4.0 – 4.0-4.5
multilaterals & rating agencies borrowing 4.5
2015 2016 BSP overnight 6.0 6.0 6.0 – 6.0-6.5
6.6% lending 6.5
6.4%
6.4% 6.3% 6.3% Average peso- 44.394 45.1722 42 - 45 43-46
6.2% dollar rate
6.0% 6.0% 6.0%
6.0% Export growth 0.5% -4.43 8% 5%
5.8%
5.8% 5.7% Import growth 1.4% 1.5%3 10% 1%
5.6%
5.6%
5.6%
Budget Surplus (73.1) (25.5)4 (283.7) (308.7)
5.4% (Deficit), Phpbn
5.2%
IMF World Bank ADB S&P Moody's
Budget surplus (0.6) (0.18) (2.0) (2.0)
(Deficit)/GDP (%)
1Government targets except for BSP overnight lending and
borrowing rates which are RSEC forecasts.
2January to October
3January to August
4January to September

16
The government has budgeted 15% more in government spending this year and
next. We expect govt. spending to pick up ahead of the 2016 elections.

Budget for infrastructure to increase from 3.4% of GDP in 2014 to 4% of GDP in

2015 & to 5% in 2016.

Low oil prices will help keep inflation subdued. Imports of mineral fuels, lubricants
and related materials were $3.8bn lower yoy in the 1st 8 months. Annualized, that’s
equivalent to 2% of full year GDP.

All the above will in turn boost consumption spending.

BSP may follow if US Fed increases interest rates, but rate hikes likely to be modest.

17
Risk issues

• GDP growth disappoints:

• Besides the usual typhoons, El Niño is an additional threat to agriculture in the 4Q
and the 1H next year. 4Q agriculture historically has been around 30% of full year. Rice
is especially vulnerable to El Nino. It accounts for 1/3 of agriculture and 4Q rice
production is 39% of full year rice production.
• Government spending fails to catch up.
• Net exports will remain hugely negative.
• Uncertainty due to presidential elections in 2016 deters investment spending and foreign
direct & portfolio investments.
• US Fed rate hike results in sharp movements in the peso-dollar rate and domestic interest
rates.

18
Risk issues

A strong El Niño until 2016 could hurt agricultural production with the consequent negative impact on
inflation & GDP. Government’s preparedness in light of advance warnings would be tested. According to the
National Oceanic & Atmospheric Administration of the US Department of Commerce, there is a 95% chance
that El Niño will continue until June 2016.

El Niño in the Philippines, agriculture growth and GDP growth

1997-2010
El Niño years* El Niño category* Real growth rate of Agriculture, Fishery & GDP growth rate
Forestry (%) (%)
1997-1998 Very strong -7.0 -0.6

2002-2003 Moderate 4.7 5.0

2004-2005 Weak 2.2 4.8

2006-2007 Weak 4.7 6.6

2009-2010 Moderate -0.2 7.6

*Source: Golden Gate Weather Services (ggweather.com) based on Oceanic Niño Index (ONI).

19
Risk issues

January to September exports down 6.9% yoy …

Exports and growth rates

2000-2014 & Jan-Aug'15

70,000 40%
34.0%
60,000 30%

50,000 20%
14.9%
40,000 9.5% 9.5% 8.8% 9.5% 10%
6.4% -2.8%
2.9% 4.0%
30,000 1.0% 0.2% 62,102 -6.9% 0%
56,698
51,498 51,995 52,100
47,410 50,466 49,078 43,746
20,000 38,078 39,681 41,255 38,436 -10%
32,150 35,208 36,231 -21.7%
10,000 -20%
-15.6%
- -30%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Jan-
Sep'15
(US$mn) Growth rate (%)

20
Risk issues

… due to soft demand from top markets such as Japan, China & Singapore.

Top export markets and growth rates January-September 2015

Country % to total Growth rates

Japan 20.6% -14.2%

USA 14.5% +1.5%
HK 13.9% +12.6%
China 9.9% -24.6%
Singapore 6.4% -20.6%

Selected top exports and growth rates January-September 2015

Commodity % to total Growth rates

Electronic products 48.1% +7.1%

Machinery and transport equipment 8.8% -5.4%
Agro-based products 6.3% -25.1%
Wood manufactures and furniture &
fixture 5.0% -14.4%
21
Stock market overview
Potential market drivers
• Economic growth is likely to remain above-trend, with a bias to the upside if government
spending picks up and oil prices remain low. Inflation is tame and interest rates are not likely to
rise sharply in the next 12 months.
• We see corporate earnings of 8% this year and 15% in 2016, compared with the 8% growth in
2014.

Market risk factors

• GDP disappoints, with El Niño an emerging critical risk factor;

• Corporate earnings disappoint;
• Timing and magnitude of US Fed lift-off continue to create uncertainty;
• 2016 presidential elections;
• China continues to unleash surprising measures to manage its economic slowdown;
• Geopolitical risks from China, Greece & the Euro zone, the Islamic State, Russia and anywhere else
would increase risk aversion.

23
Notes on the 2016 presidential elections

Philippine presidential elections are personality-centric, i.e., candidates win on the basis of
their personal popularity and not on the strength of their political platforms.

Top confirmed presidential candidates

Jejomar “Jojo” Binay Manuel “Mar” Grace Poe Rodrigo Duterte Miriam Defensor-
Roxas Santiago
• Currently Vice- • Ex-Senator, • First-time Senator in • Mayor of Davao City • Has created an
President standard-bearer 2013, but garnered for a combined 22 image of being an
• Has been Mayor of for the Liberal the most votes. years. anti-corruption
Makati City, the Party, President • Could be disqualified • Reputed to be advocate.
country’s premier Aquino’s party. because of citizenship supportive of • Her caustic wit &
financial & • Secretary of the & residency issues. extrajudicial killings of penchant to use
commercial city, for Interior and Local alleged criminals in colorful language
a cumulative 21 Government Davao. has either earned
years. • Unpopular with • Decision to run for her loyal fans or
• Popular with the the masses president was in rabid haters.
poor. because of his protest of the Senate • Claims to have
• Facing corruption upper-class Electoral Tribunal’s survived Stage 4
charges. background. decision junking the cancer but has
• Performance as case seeking to refused to show her
former Secretary disqualify Grace Poe to medical records.
of Dept. of run in the 2013
Transportation & elections.
Communication 24
has been
Notes on the 2016 presidential elections
Political platforms hardly differ among presidential candidates.
Past administrations differed only in ability to deliver on their promises, with corruption the
Achilles heel of two out of 5 past administrations after the Marcos dictatorship.

Pronouncements of presidential candidates so far …

Jejomar “Jojo” Binay Manuel “Mar” Grace Poe Rodrigo Duterte Miriam Defensor-
Roxas Santiago
• Will increase • Will pursue “clean • Will prioritize the • Long-time advocate of • Will pursue the
infrastructure government” of passage of the a federal form of passage of the
spending. the current Freedom of government. Freedom of
• Reduce corporate administration. Information Act which • Will reduce crime by Information Act.
and personal • Has not clarified she sponsored in strengthening the • Right size the
income taxes. his position Congress. criminal justice government
• Lift economic regarding • Will push for the system, among others. bureaucracy and
restrictions in the constitutional passage of the anti-red • Will streamline restore meritocracy.
constitution. amendments & tape act to Improve government • Keep the budget
• Support agriculture. reducing taxes. ease of doing bureaucracy. deficit below 3% of
• Create jobs. business. • Will emphasize values GDP.
• Respect sanctity of • Reduce income taxes. formation in school. • Spend on
contracts. • Boost tourism. infrastructure.
• Fight corruption. • Support agriculture.

25
Notes on the 2016 presidential elections

Pulse Asia survey, March 19-26, 2014

Rank Presidentiables % of votes
1 Jojo Binay 40% In a series of independent
2 Grace Poe 15% surveys from 2014 to March
3 Miriam Defensor-Santiago 10% 2015, Binay has been leading
4 Francis Escudero 9%
other presidentiables by a
5 Mar Roxas 6%
wide margin. However, he lost
his top ranking since the June
Pulse Asia survey, Sept. 8-15, 2014 2015 survey.
Rank Presidentiables % of votes
1 Jojo Binay 31% His score may have been
2 Mar Roxas 13% damaged by a recent series of
3 Miriam Defensor-Santiago 11% corruption allegations that
4 Grace Poe/Joseph Estrada 10% have been charged against
5 Francis Escudero 5%
him.

Pulse Asia survey, November 14-20, 2014

Rank Presidentiables % of votes
1 Jojo Binay 26%
2 Grace Poe 18%
3 Miriam Defensor-Santiago 12%
4 Joseph Estrada 10%
5 Francis Escudero 7%
6 Mar Roxas 6%
26
Notes on the 2016 presidential elections

Pulse Asia survey, March 1-7, 2015

Rank Presidentiables % of votes
1 Jojo Binay 29%
2 Grace Poe 14%
Grace Poe overtook Binay in
3 Joseph Estrada/Rodrigo Duterte 12%
the surveys since the June
4 Miriam Defensor-Santiago 12%
2015 survey .
5 Mar Roxas/Francis Escudero 4%

Mar Roxas, the candidate who

Pulse Asia survey, May 30 – June 5, 2015 will represent President
Rank Presidentiables % of votes Aquino’s party, substantially
1 Grace Poe 30% improved his score in the last
2 Jojo Binay 22% survey, making him a serious
3 Rodrigo Duterte 15%
contender.
4 Mar Roxas/Joseph Estrada 10%
5 Miriam Defensor-Santiago 6%

Pulse Asia survey, Sept. 8 – 14, 2015

Rank Presidentiables % of votes
1 Grace Poe 26%
2 Mar Roxas 20%
3 Jojo Binay 19%
4 Rodrigo Duterte 16%
5 Ferdinand Marcos Jr. 6%
27
 Notes on the 2016 presidential elections

The market has not behaved consistently in the year before a presidential election …

Year before a presidential election

28
Notes on the 2016 presidential elections

Year before presidential elections PSEi gain/loss Market mood of the time
(%)
1991 +77% Market anticipated that new administration could solve the power
crisis that hounded the latter years of President Corazon Aquino’s
term.

1997 -41% Business & foreign community worried that effective government
under President Fidel Ramos would reverse with a change in
administration. There was distrust towards the most popular
presidentiable, Joseph Estrada.

2003 +42% Incumbent President Gloria Macapagal Arroyo, former Vice-

President who assumed presidency because of Estrada’s ouster
from office, was running for presidency and it was believed that
her victory would legitimize her position.

2009 +63% The market was coming from the crash caused by the collapse of
Lehman Brothers. Benigno Aquino III was running and his
candidacy was getting a boost from the strong emotions
engendered by the recent demise of his mother, popular ex-
president Corazon Aquino.

2015 ? The market has been on a 5-year winning streak and valuations are
lofty. One of the strongest presidential candidates is being
investigated for corruption, although his ranking has slipped
because of the investigations.

29
Notes on the 2016 presidential elections

… but a rally after the elections has been more evident.

Year of elections

30
9M corporate earnings results
Combined 9M results of RSEC basket so far released were up only 6%.
Most results from companies & sectors were in line, but a few major disappointments, notably BLOOM,
Travellers (RWM) and NIKL, significantly pulled down the total.

Comparative Core Net income, 9M 2015 and 9M 2014 Comparative Core Net income, 9M 2015 and 9M 2014

Company Core Net Income (Phpmn) Company Core Net Income (Phpmn)
9M 2015 9M 2014 % Actual vs
PROPERTY 9M 2015 9M 2014 % Actual vs
change Forecast
BANKS change Forecast
17,600 16,740 +5% In line ALI 12,825 10,787 +19% In line
BDO
13,840 12,802 +8% Below Filinvest Land 3,188 2,841 +12% In line
BPI
Metrobank 13,253 9,127 +45% In line 8990 Holdings 3,441 3,066 +12% Above
PNB 4,377 3,622 +21% Above Megaworld 8,350 7,420 +13% In line
Security Bank 3,258 3,144 +4% In line Robinsons Land 4,355 3,880 +12% In line
Union Bank 3,700 6,000 -39% Below SM Prime 15,457 13,457 +15% In line
Total Banks 56,028 51,435 +9% Below Vista Land 5,020 4,224 +19% Above
Total Property 52,636 45,675 +15% In line
CONSUMER
Century Pacific 1,497 1,228 +22% In line HOLDING COMPANIES
Concepcion Aboitiz Equity 12,522 13,876 -10% In line
482 456 +6% In line
Industrial Ventures
D&L Industries 1,661 1,293 +28% In line Alliance Global 10,610 11,431 -5% In line
Emperador 4,703 4,566 +3% In line Ayala Corp. 17,285 14,053 +23% In line
Jollibee Foods 3,858 3,640 +6% In line 9,332 7,540 +24% Above
DMCI Holdings
Puregold 3,203 3,007 +7% In line 20,700 14,900 +39% In line
JG Summit
Robinson’s Retail 2,800 2,309 +22% In line
LT Group 4,700 2,500 +89% In line
SSI 712 640 +11% Below
Metro Pacific 8,246 6,462 +28% In line
URC (Fiscal Year 9,860 8,630 +14% In line
ending Sept.) SM 20,025 18,094 +12% In line
Total Consumer 28,776 25,769 +12% In line 103.420 88,856 +16%
31
In line
Total Holding Cos.
9M corporate earnings results

Comparative Core Net income, 9M 2015 and 9M 2014 Comparative Core Net income, 9M 2015 and 9M 2014

Company Core Net Income (Phpmn) Company Core Net Income (Phpmn)
9M 2015 9M 2014 % Actual vs 9M 2015 9M 2014 % Actual vs
change Forecast change Forecast
TELECOMS MINING
12,600 11,500 +9% In line Marcventures (62) 677 -109% Below
Globe Telecom
27,100 28,500 -5% In line Nickel Asia 2,492 8,182 -70% Above
PLDT
Total Telecoms 39,700 40,000 -1% In line Philex Mining 811 901 -10% In line

Semirara 5,898 3,889 +52% Above

Total Mining 9,139 13,649 -33% Below

POWER OTHERS
Aboitiz Power 12,999 13,411 -3% Above Bloomberry (1,509) 3,299 na Below
EDC 6,992 7,812 -10% In line Travellers 2,834 4,013 -29% Below
First Gen 5,788 5,970 -3% In line ICTSI 6,205 5,591 +11% Below
Meralco 15,795 14,286 +11% In line 4,762 4,549 +5% Above
Manila Water
Petron 5,100 3,200 +58% Above
Total Others 12,292 17,452 -30% Below
Total Power &
46,674 44,679 +4% In line GRAND TOTAL 348,665 327,515 +6%
Energy

32
Corporate earnings forecasts

2015 earnings forecasted to grow by 7%, less than growth in 2014, while 2016 earnings are forecasted to
grow by 15%.
Earnings performance in 2015 weighed down by lower earnings for mining and gaming companies.

Core net income (Phpmn) % Change

2013 2014A 2015F 2016F 2014A 2015F 2016F
BANKS 72,002 69,865 76,508 87,438 -4% 10% 14%
BDO 22,608 22,805 24,383 27,434 1% 7% 13%
BPI 18,811 18,039 19,402 22,196 -4% 8% 14%
METROBANK 11,902 9,745 14,608 16,330 -18% 50% 12%
PNB 4,796 4,860 5,223 5,749 1% 7% 10%
SECURITY BANK 2,800 3,942 4,460 6,012 41% 13% 35%
UNIONBANK 9,029 8,401 6,319 6,853 -7% -25% 8%
EAST-WEST BANK 2,056 2,073 2,113 2,865 1% 2% 36%
PROPERTY 53,264 61,500 71,337 80,605 15% 16% 13%
AYALA LAND 11,741 14,804 17,494 19,372 26% 18% 11%
FILINVEST LAND 3,918 4,534 4,824 6,093 16% 6% 26%
8990 HOLDINGS 2,184 3,309 3,978 4,602 52% 20% 16%
MEGAWORLD 8,207 9,395 10,729 11,623 14% 14% 8%
ROBINSONS LAND 4,560 4,734 5,565 6,089 4% 18% 9%
SM PRIME HOLDINGS 17,551 19,035 22,450 24,877 8% 18% 11%
VISTA LAND 5,103 5,689 6,297 7,949 11% 11% 26%
HOLDING COMPANIES 111,905 120,019 135,650 157,256 7% 13% 16%
AYALA CORP. 12,778 18,609 22,700 25,207 46% 22% 11%
ABOITIZ EQUITY 21,027 17,945 16,423 24,103 -15% -8% 47%
ALLIANCE GLOBAL 13,566 13,031 14,233 15,633 -4% 9% 10%
DMCI HOLDINGS 10,583 10,775 11,116 13,533 2% 3% 22%
JG SUMMIT 10,357 21,831 25,263 28,438 111% 16% 13%
LT GROUP 8,669 4,410 6,193 6,777 -49% 40% 9%
METRO PACIFIC 7,229 7,940 9,802 9,809 10% 23% 0%
SM INVESTMENTS 27,696 25,478 29,920 33,756 -8% 17% 13%

33
Corporate earnings forecasts

Core net income (Phpmn) % Change

2013 2014A 2015F 2016F 2014A 2015F 2016F
CONSUMER 29,454 36,458 41,004 46,468 24% 12% 13%
CENTURY PACIFIC 744 1,592 1,943 2,457 114% 22% 26%
CONCEPCION INDUSTRIAL 511 637 707 802 25% 11% 13%
D&L INDUSTRIES 1,433 1,759 2,342 2,736 23% 33% 17%
EMPERADOR 5,831 6,514 6,633 7,100 12% 2% 7%
JOLLIBEE FOODS 4,641 5,362 5,787 6,510 16% 8% 12%
PUREGOLD 3,959 4,520 4,786 5,393 14% 6% 13%
ROBINSONS RETAIL 2,720 3,536 4,512 4,915 30% 28% 9%
SSI 593 992 1,115 1,341 67% 12% 20%
UNIVERSAL ROBINA 9,022 11,546 13,179 15,214 28% 14% 15%
TELECOMS 50,334 51,899 51,021 55,384 3% -2% 9%
GLOBE TELECOM 11,617 14,489 16,488 18,252 25% 14% 11%
PHIL. LONG DISTANCE 38,717 37,410 34,533 37,132 -3% -8% 8%
POWER 55,520 54,294 58,536 66,924 -2% 8% 14%
ABOITIZ POWER 20,124 16,841 16,352 19,339 -16% -3% 18%
ENERGY DEVELOPMENT 6,565 9,197 9,057 11,012 40% -2% 22%
FIRST GEN 6,561 6,808 7,325 9,523 4% 8% 30%
MERALCO 17,023 18,128 18,860 17,212 6% 4% -9%
PETRON 5,247 3,320 6,942 9,838 -37% 109% 42%
MINING 12,358 16,605 13,074 20,546 34% -21% 57%
MARCVENTURES 1,018 1,088 988 911 -17% 17% -8%
NICKEL ASIA 1,832 7,199 3,089 8,163 322% -60% 164%
PHILEX 1,508 1,122 896 588 -26% -20% -34%
SEMIRARA MINING 8,001 6,913 8,101 10,884 -14% 17% 34%
OTHERS 14,975 22,847 17,059 19,881 50% -24% 16%
BLOOM (1,502) 4,094 (460) 1,322 na na na
TRAVELLERS 3,433 5,445 3,852 4,068 59% -29% 6%
ICTSI 7,292 7,663 8,017 9,286 5% 5% 16%
MANILA WATER 5,752 5,645 5,650 5,205 -2% 0% -8%

BASKET 399,812 433,488 464,191 534,501 8% 7% 15%

34
 Stock recommendations

Company Price Target Total Net Income (Phpmn) EPS(Php) PE (x) ROE (%) Dividend
(Php, Price return yield
12/02) (Php) (%) (%)

’14A ’15F ‘16F ’14A ’15F ‘16F ‘14A ’15F ’16F ‘14A ’15F ’16F ’15F ’16F

METROBANK 81.10 106.00 31.9% 9,745 14,608 16,330 3.37 4.59 5.12 24.6 17.7 15.8 6.9 8.8 8.6 1.2% 1.2%

AYALA LAND 34.80 43.16 25.2% 14,804 17,494 19,372 1.04 1.21 1.32 32.4 28.8 26.4 14.6 14.7 14.0 1.2% 1.2%

MEGAWORLD 4.62 6.50 42.0% 9,395 10,729 11,623 0.29 0.33 0.36 15.9 14.0 12.8 9.3 9.3 9.4 1.3% 1.4%

ROBINSONS LAND 29.50 34.70 18.8% 4,734 5,565 6,089 1.16 1.36 1.49 22.8 21.7 19.8 9.3 10.2 10.3 1.2% 1.2%

D&L INDUSTRIES 9.35 12.90 39.6% 1,759 2,342 2,736 0.25 0.33 0.38 33.3 28.3 24.6 21.4 28.5 28.4 1.6% 1.7%

ROBINSONS RETAIL
70.00 92.80 33.3% 3,536 4,512 4,915 2.57 3.26 3.55 29.5 21.5 19.7 9.3 10.8 10.7 0.7% 1.0%

UNIVERSAL ROBINA
193.10 226.00 18.6% 11,546 13,179 15,214 5.29 6.04 6.97 37.1 32.0 27.7 22.2 29.1 34.2 1.6% 1.6%

ENERGY DEV. CORP.

6.26 9.10 48.7% 9,197 9,057 11,012 0.49 0.48 0.59 16.7 13.0 10.6 27.4 22.4 23.6 3.4% 4.0%

FIRST GEN 24.70 29.60 21.3% 6,808 7,325 9,523 1.66 1.65 2.25 15.4 15.0 11.0 45.5 27.7 26.2 1.4% 2.1%

PETRON 7.48 12.50 67.8% 3,320 6,942 9,838 0.002 0.41 0.74 4,608.7 18.2 10.1 0.1 9.0 13.4 0.7% 0.7%

SEMIRARA MINING
137.00 192.00 43.1% 6,913 8,101 10,884 6.47 7.58 10.18 22.0 18.1 13.5 32.3 32.9 36.5 2.9% 2.9%
Summary

• Banks will be weighed down by capital raising requirements for Basel III and for domestic
systematically important banks (DSIBs), the cap on real estate lending and the ASEAN integration,
among others. But we like MBT because its capital ratios are more than enough to comply with the
regulation and it stands to benefit the most from the prospect of higher NIMs as interest rates
increase.
• Property companies will continue to benefit from rising income and low interest rates. Any interest
rate hike is expected to be minimal. We prefer property companies whose revenues have a
significant rental income component.
• Ayala Land is the top and most diversified property developer in the Philippines and has led other
property companies in profit growth in the past few years.
• We like MEG because it is the largest BPO landlord and is the biggest land owner in Fort Bonifacio.
• We also like Robinsons Land because of the increasing share of higher-margin recurring income to
the company’s revenue stream.
• We expect robust consumer spending to continue, driven by consumer confidence, OFW
remittances and BPO income. Among consumer stocks, we like CNPF, DNL, RRHI & URC.
• Power companies EDC, FGEN & Semirara are recovering strongly after technical issues in 2013 and
their capacity expansion programs are starting to come on stream.
• Petron has started to realize the expected benefits from its recently-completed $2bn refinery
upgrade.
• Gaming stocks are being hit by China’s effort to curb corruption among its officials, which has
already adversely affected Macau’s gaming revenues.
• Our 12-month forward target PSEi level is 8,200. Our PSEi target translates to a 15% yoy increase.
36
 Property sector – low interest rates, growing BPO industry and
OFW remittances sustain growth

Price FV Expected Mkt Cap Net income

Recom (Php) (Php) Return (US$mn) (Phpmn) EPS (Php) EPS change PE (x) BVPS (Php) PBR (x) ROE (%)

(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

ALI Buy 1 34.80 43.16 25.2% 10,827 17,494 19,372 1.21 1.32 16% 9% 28.8 26.4 9.02 9.85 3.9 3.5 14.7 14.0

FLI Buy 1 1.88 2.16 17.6% 967 4,824 6,093 0.20 0.25 5% 23% 9.4 7.7 2.27 2.47 0.8 0.8 9.8 11.5

HOUSE Buy 1 7.00 12.50 82.9% 819 3,978 4,602 0.72 0.83 14% 15% 9.7 8.4 3.12 3.59 2.2 1.9 24.8 24.8

MEG Buy 1 4.62 6.50 42.0% 3,158 10,729 11,623 0.33 0.36 12% 9% 14.0 12.8 3.71 4.00 1.2 1.2 9.3 9.4

RLC Buy 1 29.50 34.70 18.8% 2,560 5,565 6,089 1.36 1.49 17% 10% 21.7 19.8 13.85 14.98 2.1 2.0 10.2 10.3

SMPH Hold 22.35 23.00 3.9% 13,684 22,450 24,877 0.78 0.86 15% 10% 28.7 26.0 6.45 7.08 3.5 3.2 12.0 12.2

VLL Buy 1 5.35 6.15 17.4% 969 6,297 7,949 0.74 0.59 10% -20% 7.2 9.1 6.83 6.63 0.8 0.8 11.3 10.8

37
A property bubble may be mitigated by the following factors:
• Property companies are not overly leveraged.
• Property companies build residential high rise condominiums tower by tower. They do not build
the next tower until 70% of the current tower has been sold.
• Foreigners are restricted from owning land in the Philippines.
• Most property companies do not book revenues until 20% D/P has been paid.
• Loanable value of real estate mortgages has been capped at 60% of property’s appraised value.
• The BSP has expanded the 20% restriction on loans to the real estate sector by including housing
loans and banks’ investments in securities issued by property companies.

38
Property companies are not overleveraged.

Stockholder's
Total Debt Cash Net Debt-to-
Company Equity
(Phpmn) (Phpmn) Equity (x)
(Phpmn)

Ayala Land 124,635 144,357 27,109 0.68

Filinvest Land 42,930 53,000 5,512 0.71

8990 Holdings 12,426 16,023 503 0.74

Megaworld 39,314 130,698 21,558 0.14

Robinsons Land 22,524 55,451 1,238 0.38

SM Prime Holdings 141,200 206,972 19,591 0.59

Vista Land 48,813 56,248 11,262 0.67

39
Consumer Sector – driver & beneficiary of growth

• Robust consumer spending to continue in line with:

– Benign inflation
– Record-low interest rates
– Rising OFW remittances
– Growing BPO sector
– Low price of oil -- oil at $50/barrel will result in annual import bill reduction of $6bn, 2% of GDP.
– Leverage is still limited with consumer loans/GDP at only 7.1% in the 4Q2014. Bank and credit card
penetration rates are low at of 27% and 2%, respectively.

• We forecast aggregate earnings growth of 12% this year, lower than the actual 24% growth in 2014.

• Forecasted sector ROE of 22.0% for 2015 and 21.7% for 2016.

• Consolidated 2015 capex of Php35.4bn or $755mn earmarked by consumer stocks currently under RSEC
coverage. Consolidated 2016 capex to grow by at least 7% based on initial guidance.

40
 Consumer Sector – driver & beneficiary of growth

Recom Price Fv Expected Mkt Cap Net Income EPS (Php) EPS change PE BVPS PBR ROE
(Php, (Php) Return (US$mn) (Phpmn)
12/2) (%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F
CNPF Buy 1 17.28 21.90 27.9% 864 1,943 2,457 0.87 1.04 16% 20% 19.9 16.6 3.62 5.19 4.8 3.3 26.7 24.3
CIC Buy 1 41.95 56.30 35.6% 302 707 802 2.08 2.36 11% 13% 20.2 17.8 9.63 11.36 4.4 3.7 34.6 30.9
DNL Buy 1 9.35 12.90 39.6% 1,416 2,342 2,736 0.33 0.38 32% 15% 28.3 24.6 1.71 1.93 5.5 4.8 28.5 28.4
EMP Buy 2 9.33 10.30 12.0% 3,189 6,633 7,100 0.42 0.45 -2% 7% 22.2 20.7 3.09 3.38 3.0 2.8 13.9 13.6
JFC Buy 2 206.80 226.00 10.1% 4,690 5,787 6,510 5.41 6.09 7% 13% 38.2 34.0 29.36 33.54 7.0 6.2 29.1 26.9
PGOLD Buy 2 34.20 38.40 13.2% 2,005 4,786 5,393 1.73 1.95 6% 13% 19.8 17.5 13.80 15.45 2.5 2.2 13.2 13.3
RRHI Buy 1 70.00 92.80 33.3% 2,055 4,512 4,915 3.26 3.55 27% 9% 21.5 19.7 31.70 34.74 2.2 2.0 10.8 10.7
SSI Buy 1 4.38 10.40 137.4% 308 1,115 1,341 0.34 0.40 -43% 18% 12.9 11.0 3.02 3.42 1.5 1.3 11.8 12.6
URC Buy 1 193.10 226.00 18.6% 8,931 13,179 15,214 6.04 6.97 14% 15% 32.0 27.7 20.03 24.00 9.6 8.0 29.1 34.2

41
 Power sector: Supply risks remain despite expected additional capacity.

• Mindanao has been suffering from brownouts since 2010. This is due to inadequate baseload
capacity (only 37%) and 48% of capacity coming from hydro, which can hardly run during summer.
• Luzon’s capacity is also vulnerable as around 18% is accounted for by hydro. Baseload plants
comprise 64% of capacity. 23% of power plants in Luzon are more than 30 years old, hence
requiring frequent maintenance.
• Renewable energy projects are provided incentives under the feed-in-tariff system (FIT). EDC’s
150MW Burgos wind farm is one of the first to enjoy the incentives.
– Renewable energy (RE) projects eligible for the FIT system will be given guaranteed generation
volume and power rates for 20 years. The rates are adjusted for local inflation and foreign
exchange.
– Awarding of the FIT system is on a first-come, first served basis where those first
commissioned will be awarded the guaranteed rates.

Recom Price FV Expctd Mkt Cap Net Income EPS (Php) EPS change PE BVPS PBR ROE
(Php) (Php) Return (US$mn) (Phpmn)
(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

AP Hold 41.30 41.00 3.3% 6,443 16,352 19,339 2.22 2.63 -3% 18% 18.6 15.7 13.56 15.07 3.0 2.7 17.3 18.6
EDC Buy 1 6.26 9.10 48.7% 2,488 9,057 11,012 0.48 0.59 -2% 23% 13.0 10.6 2.65 2.99 2.4 2.1 22.4 23.6
FGEN Buy 1 24.70 29.60 21.3% 1,917 7,325 9,523 1.65 2.25 -1% 36% 15.0 11.0 7.72 9.46 3.2 2.6 27.7 26.2

MER Sell 312.20 283.00 -4.5% 7,460 18,860 17,212 16.73 15.27 4% -9% 18.7 20.4 71.81 71.21 4.3 4.4 23.6 21.4
17726
PCOR Buy 1 7.48 12.50 67.8% 1,487 6,942 9,838 0.41 0.74 80% 18.2 10.1 3.50 4.43 2.1 1.7 9.0 13.4
%

42
 Holding companies – outlook depends on which investee company is their
major source of income

In general, we favor holding companies with significant presence in consumer, real estate and infrastructure,
subject to reasonable valuations.
Price FV Expctd Mkt Cap
Net Income
Recom (Php) (Php) Return (US$mn) EPS (Php) EPS change PE BVPS PBR ROE
(Phpmn)
(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

AC Buy 1 757.00 860.50 14.3% 9,941 22,700 25,207 35.79 39.84 21% 11% 21.2 19.0 265.91 301.80 2.8 2.5 13.8 13.6

AEV Buy 2 57.55 60.00 6.2% 6,764 16,423 24,103 2.96 4.34 -11% 47% 19.4 13.3 21.28 24.63 2.7 2.3 11.6 15.0

AGI Buy 1 17.90 30.80 74.9% 3,897 14,233 15,633 1.39 1.52 10% 9% 12.9 11.8 13.20 14.17 1.4 1.3 10.5 10.7

DMC Buy 1 13.72 17.80 33.4% 3,862 11,116 13,533 0.84 1.02 4% 21% 16.3 13.5 4.57 4.99 3.0 2.7 19.0 21.3

JGS Hold 71.50 71.30 0.0% 10,858 25,263 28,438 3.53 3.97 14% 12% 20.3 18.0 33.51 37.30 2.1 1.9 12.6 12.4

LTG Sell 15.00 14.25 -4.5% 3,441 6,193 6,777 0.57 0.63 39% 11% 26.3 23.8 11.93 12.45 1.3 1.2 4.9 5.1

MPI Hold 5.30 5.47 4.4% 3,133 9,802 9,809 0.37 0.35 20% -3% 14.5 15.0 3.36 3.66 1.6 1.4 10.9 10.0

SM Buy 2 862.00 922.00 8.3% 14,589 29,920 33,756 41.24 46.06 16% 12% 20.9 18.7 352.04 384.75 2.4 2.2 12.1 12.5

43
 Telecom – intense competition in a market facing limited growth

Globe has managed to increase its market share in mobile and broadband since last year to 40% from 35%
previously, lifting its share price by 18% ytd.
PLDT has been sold down due to its market share loss but stock is a worthy investment for its forecasted 2016
dividend yield of 6.7%.
Telstra’s entry through partnership with SMC worsens outlook for current players.

Price FV Expected Mkt Cap

Net Income
Recom (Php) (Php) Return (US$mn) EPS (Php) EPS change PE BVPS PBR ROE
(Phpmn)
(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

GLO Buy 1 2,042 2,450 24.0% 5,755 16,488 18,252 119.65 133.53 8% 12% 17.1 15.3 322.69 361.38 6.3 5.7 37.5 40.4

TEL Buy 1 2,154 2,729 33.8% 9,867 34,533 37,132 159.56 171.58 -8% 8% 13.5 12.6 691.25 719.02 3.1 3.0 46.7 44.0

44
 Mining sector – recovery of metal prices uncertain

Drop in gold, copper and nickel prices seem to have stopped, but whether prices will reverse trend is
uncertain.
Even if metal prices start to trend up, recovery in prices of mining companies will likely face heavy resistance
along the way.

Price FV Expected Mkt Cap

Net Income
Recom (Php) (Php) Return (US$mn) EPS (Php) EPS change PE BVPS PBR ROE
(Phpmn)
(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

MARC Buy 1 2.13 3.30 69.0% 82 988 911 0.54 0.50 17% -7% 3.9 4.3 2.06 2.56 1.0 0.8 28.0 21.6

NICKL Buy 1 6.70 9.76 53.1% 1,079 3,089 8,163 0.41 1.07 -64% 161% 16.3 6.3 4.51 5.88 1.5 1.1 13.2 28.9

PX Buy 1 5.03 6.80 36.2% 527 896 588 0.18 0.12 -21% -33% 27.9 41.9 4.78 5.03 1.1 1.0 3.9 2.4

SCC Buy 1 137.00 192.00 43.1% 3,104 8,101 10,884 7.58 10.18 17% 34% 18.1 13.5 24.83 31.01 5.5 4.4 32.9 36.5

45
 Banking sector – still at risk of lower income and
additional capital raising
Banks’ income will still be at risk due to likelihood of a US Fed rate hike going forward, which limits potential
for earning trading gains.
At the same time, additional capital requirement for DSIBs make further capital raising and, therefore,
dilution, possible.

Price FV Expctd Mkt Cap

Net Income
Recom (Php) (Php) Return (US$mn) EPS (Php) EPS change PE BVPS PBR ROE
(Phpmn)
(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

BDO
Buy 1 103.10 124.00 22.3% 7,827 24,383 27,434 5.98 6.68 6% 12% 17.2 15.4 53.07 58.50 1.9 1.8 13.3 13.5
BPI
Buy 1 84.50 106.00 27.6% 7,039 19,402 22,196 4.94 5.65 7% 14% 17.1 15.0 39.06 42.91 2.2 2.0 13.2 13.8
MBT
Buy 1 81.10 106.00 31.9% 5,468 14,608 16,330 4.59 5.12 36% 12% 17.7 15.8 57.58 61.74 1.4 1.3 8.8 8.6
PNB
Buy 1 51.20 76.00 48.4% 1,356 5,566 7,543 4.18 4.60 5% 10% 12.2 11.1 70.54 76.58 0.7 0.7 6.3 7.9
SECURITY
BANK Buy 2 140.00 151.00 9.3% 1,789 4,460 6,012 7.39 9.97 13% 35% 18.9 14.0 86.67 94.64 1.6 1.5 9.1 11.0
UNIONBANK
Buy 1 57.00 73.40 32.5% 1,279 6,319 6,853 5.98 6.48 -25% 8% 9.5 8.8 57.17 61.55 1.0 0.9 13.5 13.3
EAST-WEST
Buy 1 18.66 22.80 22.2% 593 2,113 2,865 1.50 1.91 -18% 27% 12.4 9.8 20.99 22.96 0.9 0.8 8.4 9.1

46
 Other companies

Gaming stocks have been sold down due to disappointing interim results.

ICTSI has been affected by slowing global growth. The company recently cut its planned capital
expenditures of $530mn this year byhalf.

MWC faces regulatory issues which resulted in reduced profit estimates. It received 2013-2017 rate
rebasing adjustment of -11% from its 2012 basic water charge in the final award of the Appeals Panel in
the arbitration.

Recom Price FV Expected Mkt Cap Net Income EPS (Php) EPS change PE BVPS PBR ROE
(Php) (Php) Return (US$mn) (Phpmn)
(%)

’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F ’15F ’16F

BLOOM Buy 1 5.38 6.30 17.1% 1,258 (460) 1,322 (0.04) 0.12 na na (134.5) 44.8 2.29 2.40 2.3 2.2 (1.8) 5.3
RWM Buy 1 3.94 4.80 23.6% 1,316 3,852 4,068 0.24 0.26 -31% 8% 16.4 15.2 2.66 2.87 1.5 1.4 10.0 9.3
ICT Buy 1 75.00 101.00 35.8% 3,237 8,017 9,286 2.95 3.33 -5% 13% 25.4 22.5 22.41 24.77 3.3 3.0 13.5 14.1
MWC Sell 24.50 23.00 -3.2% 1,065 5,650 5,205 2.25 2.01 -1% -11% 10.9 12.2 17.64 18.94 1.4 1.3 13.3 11.0

47
 Disclaimer
This publication and the contents hereof are intended for information purposes only. The contents of this
publication were produced by RCBC Securities Inc. as of the date of this writing and may be subject to
change without notice. This publication has been prepared without taking into account the objectives,
financial situation or needs of any particular investor. Any use, reproduction, disclosure, distribution,
dissemination, copying or printing of this publication without our prior consent or approval is strictly
prohibited. None of RCBC Securities Inc., its parent, holding companies, subsidiaries and affiliates
accepts any responsibility or liability whatsoever for any use or reliance upon this publication or any of
the contents hereof. Neither this publication, nor the contents hereof, constitutes or is to be construed
as an offer or solicitation of an offer to buy or sell any of the securities or investments mentioned herein,
or, unless expressly provided, a recommendation or investment opinion. RCBC Securities Inc., its parent,
holding companies, subsidiaries and affiliates, may have positions or may be materially interested in the
securities mentioned in this publication or may have performed corporate finance and other services for
the issuers of such securities.
Views expressed in this report reflect the personal views of the undersigned analyst/s. The undersigned
analyst has not and will not receive any compensation for providing specific recommendations or views
in this report.

48