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Notable Movers:
Shares of RRHI fell following news that the Rustan’s trademark is not included in
RRHI (-5.56%)
the acquisition
Although nobody knows where the bottom of this correction will be and how quickly the market
will recover, investors who bought stocks too early should not worry and just hold on. Based INDEX GAINERS
on our analysis of the past 10 major corrections, an investor who bought the market when the Ticker Company Price W/W
index was down 13% from the peak would have generated a median return of 11.9% six months
JFC Jollibee Foods Corp 292.20 5.11
forward and 20.2% 12 months forward. He would not have been able to participate in three out
of the past 10 corrections, but in the seven corrections that he was able to participate in, he AC Ayala Corporation 956.00 4.03
would have generated a positive return six out of seven times based on a six-month investment AGI Alliance Global Inc 14.18 3.81
time horizon and seven out of seven times based on a 12-month investment time horizon. MEG Megaworld Corporation 4.65 2.88
BDO BDO Unibank Inc 138.30 2.75
In fact, investors who are looking to buy this correction can already start accumulating at these
levels since 1.) the return outlook six to 12 months going forward is already positive; 2.) on
average, the market bottomed three months from the peak. Since we peaked in January 29,
the market could bottom sometime end of April; and 3.) by being early, an investor is in a better INDEX LOSERS
position to fully invest his portfolio. Ticker Company Price W/W
RRHI Robinsons Retail Hldgs Inc 84.9 -5.56
PIZZA: Full year core income up 13.9% to MPI Metro Pacific Inv Corp 4.93 -5.19
Full year recurring profits up 13.9% y/y to Php762 Mil. PIZZA’s fourth quarter performance
brought its full year recurring net income to Php762 Mil, up 13.9% from 2016’s recurring net
income of Php669 Mil. This is in line with COL (101.7% of full year forecast) and consensus (99.0% TOP 5 MOST ACTIVE STOCKS
of full-year) forecasts. Earnings growth was driven by a robust 17.8% y/y increase in revenues to
Php7.0 Bil. Recurring operating expenses increased by a slower pace of 9% y/y to Php905 Mil, Ticker Company Turnover
resulting to a steady recurring operating profit margin (OPM) of 19.1%. This allowed recurring ALI Ayala Land Inc 457,172,250
operating income to rise by 14.2% y/y to Php1.2 Bil. AC Ayala Corporation 369,963,200
BDO BDO Unibank Inc 332,076,925
Growth story continues. PIZZA’s growth story remains intact as the company looks favorably SM SM Investments Corp 314,598,900
into 2018. This year, key initiatives include value-enhancing promotions and product innovations, JFC Jollibee Foods Corp 263,327,538
continuous improvement in store aesthetics and atmosphere to elevate dine-in experience,
and improving its delivery segment. PIZZA is now ramping up the improvement of its delivery
infrastructure and systems and it expects the contribution of its delivery segment to gather
momentum by the second half of this year.
With these initiatives, PIZZA aims to grow its 2018 revenues in the low double-digit level, driven
by SSSG of 3% to 5%. It also plans to open 20 new stores this year. This is in line with our forecast
as we expect PIZZA to grow revenues by 13.6% this year to Php8.0 Bil. PIZZA also aims to maintain
its margins in 2017. Although it cites near term pressures from cost inflation of around 1% to 2%,
it already raised selling prices in March by 3%.
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the COL Financial website as these may be subject to tampering or unauthorized alterations.
WEEKLY NOTES I PHILIPPINE EQUITY RESEARCH
Other Stories:
Market Summary:
The PSEi declined during the week. The benchmark index lost 45.68 points or -0.58% to close at
7899.98. Value turnover decreased to Php26.2 from Php31.0Bil the previous week. Foreigners
continued to be net sellers throughout the week, liquidating Php1.8Bil worth of shares
APRIL
WEEKLY NOTES I PHILIPPINE EQUITY RESEARCH
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 27 28 29 30 31
1 31 6 7 8 9 10
HOLD
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 in line or underperform in the market in the next six to twelve
months.
SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the share price to underperform in the next six to12 months.
IMPORTANT DISCLAIMER
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 said information 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 prior 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 and/
or its employees not involved in the preparation of this report may have investments in securities of derivatives of the companies mentioned in this report and may trade
them in ways different from those discussed in this report.