WED 20 NOV 2019
Top Stories:
ACEPH: ACEPH to build 60MW solar farm in Zambales
SCC: DOE imposes a month of suspension on SCC’s coal trading activities
(AS OF NOV 19, 2019)
INDICES
Other News: Close Points % YTD%
PSEi 7,912.14 31.20 0.40 5.98
All Shares 4,729.72 9.46 0.20 4.69
Economy: Overall BOP position posts US$163Mil surplus in October Financials 1,919.01 9.07 0.47 7.82
Holding Firms 7,806.99 34.71 0.45 6.34
TEL: Voyager expected to be profitable by 2024
Industrial 10,037.24 21.09 0.21 -8.35
Economy: Duterte bans use, importation of e-cigarettes Mining & Oil 8,601.01 50.92 0.60 4.88
VLL: VLL partners with Mitsubishi to develop Manila condominium Property 4,075.63 2.09 0.05 12.34
Services 1,549.57 5.72 0.37 7.41
Dow Jones 27,934.02 -102.20 -0.36 19.75
Market Summary: S&P 500 3,120.18 -1.85 -0.06 24.47
Nasdaq 8,570.66 20.72 0.24 29.17
Shares rebounded on Tuesday, snapping its 4-day losing streak, on the back of selected
buying of large cap stocks. INDEX GAINERS
Ticker Company Price %
LTG LT Group Inc 12.42 6.70
The PSEi added 31.2 points or 0.39% to close at 7,912.14. The top movers were BDO (+1.55%), AP Aboitiz Power Corp 36.50 1.67
LTG (+6.70%), SECB (+1.60%), MBT (+0.89%), and JGS (+0.52%). On the other hand, these SECB Security Bank Corp 203.80 1.60
BDO BDO Unibank Inc 1.55
were partially offset by decliners like BPI (-1.57%), MER (-1.43%), SMPH (-0.25%), FGEN 157.40
DMC DMCI Hldgs Inc 7.62 1.46
(-1.07%), and SCC (-1.06%).
INDEX LOSERS
Value turnover increased to Php6.2Bil from Php4.3Bil in the previous session. Meanwhile, Ticker Company Price %
foreigners, turned net sellers, disposing Php1.0Bil worth of shares. BPI Bank of the Phil Islands 94.00 -1.57
MER Manila Electric Co 330.20 -1.43
FGEN First Gen Corporation 23.05 -1.07
SCC Semirara Mining 23.40 -1.06
SMPH SM Prime Hldgs Inc 39.80 -0.25
TOP 5 MOST ACTIVE STOCKS
Ticker Company Turnover
AGI Alliance Global Inc 2,394,943,000
ALI Ayala Land Inc 460,694,600
SM SM Investments Corp 294,229,000
AC Ayala Corporation 200,432,100
SMPH SM Prime Hldgs Inc 196,775,100
Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside of the
COL Financial website as these may be subject to tampering or unauthorized alterations.
DAILY NOTES I PHILIPPINE EQUITY RESEARCH
WED 20 NOV 2019
Top Stories:
George Ching
ACEPH: ACEPH to build 60MW solar farm in
Senior Research Manager
Zambales
AC Energy Philippine, Inc.
BUY ACEPH to build 60MW solar farm in Zambales. ACEPH disclosed that it is putting up
Php3.12
a 60MW solar farm in Palauig, Zambales. The company said the project is targeted for
completion in 2020. The project will be finance using a Php8Bil short term credit line.
This is in line with ACEPH’s plan to further expand its renewable energy portfolio. Once
completed, the Zambales solar farm will boost ACEPH’s attributable capacity by 9.8%.
Maintaining BUY rating on ACEPH. We have a BUY rating on ACEPH with a FV estimate
of Php3.12/sh. We like ACEPH as it is an excellent turnaround and growth story. We
believe that PHEN’s long-term outlook would improve with the AC Energy’s plan to inject
power generation assets, and given the company’s improved position to expand its
renewable energy portfolio with the backing of the AC group. At Php2.58/sh, upside to
our FV estimate of Ph3.12/sh is at 21%.
George Ching SCC: DOE imposes a month of suspension on SCC’s
Senior Research Manager
coal trading activities
Semirara Mining Corp.
BUY DOE imposes a month of suspension on SCC coal trading activities. SCC disclosed
Php31.20
today that it has received from the Department of Energy (DOE) a resolution finding SCC
in violation with selling coal to a buyer which did not have a Coal Accreditation Certificate
with the DOE. The DOE imposed penalties including the suspension for one month of
SCC’s coal trading activities (except to SCC’s own power plants and coal for other local
power plants) and a fine of Php1.73Mil. SCC said it will file a motion to the DOE seeking
reconsideration of the resolution. Furthermore, it added that given the resolution is not
yet final and executory, SCC will continue its coal trading activities to serve its existing
customers.
The impact of the month long suspension on coal trading activities will depend on when
the trading halt will be implemented (if the suspension will be implemented during the
lean shipping months for coal), given that the DOE resolution is not yet executory. Its
impact on SCC’s power generation will not be affected as the suspension is only limited
to non-power customers. Meanwhile, the Php1.73Mil fine will not have a material impact
on SCC.
COL Financial Group, Inc. 2
DAILY NOTES I PHILIPPINE EQUITY RESEARCH
WED 20 NOV 2019
Maintain BUY rating. We have a BUY rating on SCC with a FV estimate of Php31.2/sh.
While near term sentiment may not improve in the near term due to the weakness in
coal price, we believe that much of the negative news is already priced-in, as SCC’s share
price has declined by 9.6% in the past 12 months, underperforming the PSEi’s 16.1% rise.
The stock is also the cheapest among all power companies, trading at only 9.4X 2019E
P/E based on our revised earnings forecast and capital appreciation potential remains
significant at 32.5%, also based on our revised fair value estimate.
Other News:
Research Analysts Economy: Overall BOP position posts US$163Mil surplus in
John Martin Luciano
October
Frances Rolfa Nicolas
Justin Richmond Cheng
The Philippines’ overall balance of payments (BOP) position posted a surplus of US$163Mil
Adrian Alexander Yu
in October, a turnaround from the US$458Mil deficit recorded in the same month last
Kerwin Malcolm Chan
year. Inflows for the month was largely driven by the increase in the government’s net
foreign currency deposits and the BSP’s income from its investments abroad. On the other
hand, these were partly offset by outflows from the payments made by the government
on its foreign exchange obligations. Meanwhile, for the January to October period, the
BOP position posted a surplus of US$5.7Bil, a reversal from the US$5.6Bil deficit recorded
in the same period last year. (Source: BSP)
TEL: Voyager expected to be profitable by 2024
According to TEL President and CEO Manny Pangilinan, TEL’s Voyager Innovations Inc. is
expected to be profitable in the next five years as its financial technology arm PayMaya
continues to grow. PayMaya is eyeing to post a yearly transaction volume of Php1Tril by
2023 from Php200Bil annually at present. Pangilinan mentioned that Voyager is trying to
raise funding which could finance the next three to five years of their operations. Voyager
also announced last August that former American Express Executive and VISA Director
Shailesh Baidwan was appointed as its new president and will help shape the company’s
strategy and business direction. (Source: Philstar)
Economy: Duterte bans use, importation of e-cigarettes
President Duterte said that he would ban the use and importation of vaping or e-cigarettes
due to its toxicity and to protect public health. Moreover, the president has ordered law-
enforcement agencies to arrest anybody vaping in public. (source: Inquirer)
COL Financial Group, Inc. 3
DAILY NOTES I PHILIPPINE EQUITY RESEARCH
WED 20 NOV 2019
VLL: VLL partners with Mitsubishi to develop Manila condominium
VLL has formed a joint venture (JV) with Japanese real estate developer Mitsubishi Estate
Co., Ltd. to develop a mixed-use condominium in Manila. The JV will build a high-rise
condominium with 32 floors for residential units, seven floors for parking and one floor
for commercial space. The project is targeted to be launched within the first half of 2020,
and to be turned over to tenants by the second half of 2024. (source: Businessworld)
Change in Shareholdings:
Acquired or Price per
Stock Volume Person (Designation)
Disposed share
100,000 3.40
100,000 3.41 Manuel B. Zamora, Jr.
NIKL A
100,000 3.55 (Chairman Emeritus)
300,000 3.56
Source: PSE
COL Financial Group, Inc. 4
DAILY NOTES I PHILIPPINE EQUITY RESEARCH
WED 20 NOV 2019
I M P O R TA N T R AT ING DEFINITIONS
BUY
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 12 months.
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.
I M P O R TA N T DISC L AIM ER
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.
CO L R E S EAR C H T EAM
APRIL LYNN TAN, CFA
VP & HEAD OF RESEARCH
april.tan@colfinancial.com
CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA
DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com
JOHN MARTIN LUCIANO FRANCES ROLFA NICOLAS JUSTIN RICHMOND CHENG
SENIOR RESEARCH ANALYST RESEARCH ANALYST RESEARCH ANALYST
john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com justin.cheng@colfinancial.com
ADRIAN ALEXANDER YU KERWIN MALCOLM CHAN
RESEARCH ANALYST RESEARCH ANALYST
adrian.yu@colfinancial.com kerwin.chan@colfinancial.com
C OL F INANC IAL G R O UP, IN C.
2402-D EAST TOWER, PHILIPPINE STOCK EXCHANGE CENTRE,
EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
TEL NO. +632 636-5411
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WEBSITE: www.colfinancial.com
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