VISTAMALLS (STR)
FINANCIAL STATEMENTS
MARKET DATA
Vistamalls, Inc. (formerly Starmalls, Inc.) is a leading player in the Philippine real estate market, with a
focus on developing and leasing retail malls and business process outsourcing (BPO) commercial centers.
As a subsidiary of the larger Vista Land & Lifescapes, Inc. conglomerate, Vistamalls has established itself
as a key player in the country's rapidly growing retail and commercial real estate sectors.
Financial Performance
Vistamalls' financial performance has been consistent, with revenue and earnings growth in recent years.
The company's revenue for the trailing twelve months (TTM) stood at ₱14.74 billion, with a net income of
₱9.36 billion. This represents a significant increase from the previous year, indicating the company's ability
to adapt to changing market conditions and expand its operations effectively.
Valuation
The company's valuation metrics suggest that Vistamalls is currently undervalued. The price-to-earnings
(P/E) ratio stands at 2.0x, which is lower than the industry average. Also, the price-to-sales (P/S) ratio is
1.3x, indicating that the company's stock price is relatively low compared to its revenue. This presents an
attractive opportunity for investors looking to enter the market.
Market Performance
Vistamalls' stock price has been volatile in recent months, with a 1-month change of -1.74% and a 3-month
change of -5.44%. However, the company's performance over the past year has been less impressive, with a
1-year change of -19.00%. This underperformance is likely due to broader market trends and the company's
specific challenges in the competitive real estate sector.
Competitive Position
Vistamalls operates in a highly competitive market, with several other real estate developers and operators
vying for market share. The company's competitive position is strengthened by its diversified portfolio of
retail malls and BPO commercial centers, which provides a stable source of revenue. Also, Vistamalls'
strong financial performance and undervalued stock price make it an attractive option for investors seeking
exposure to the Philippine real estate market.
INDUSTRY REPORTS AND NEWS
Vistamalls, Inc. Reports Earnings Results for the First Quarter Ended March 31, 2024
May 20, 2024 at 11:16 pm EDT
Vistamalls, Inc. reported earnings results for the first quarter ended March 31, 2024. For the first quarter, the
company reported sales was PHP 3,404 million compared to PHP 2,567 million a year ago. Revenue was
PHP 3,693 million compared to PHP 2,648 million a year ago.
Net income was PHP 2,252 million compared to PHP 1,423 million a year ago. Basic earnings per share
from continuing operations was PHP 0.267 compared to PHP 0.169 a year ago. Diluted earnings per share
from continuing operations was PHP 0.267 compared to PHP 0.169 a year ago.
Vistamalls, Inc. Reports Earnings Results for the Full Year Ended December 31, 2023
April 28, 2024 at 08:33 pm EDT
Vistamalls, Inc. reported earnings results for the full year ended December 31, 2023. For the full year, the
company reported sales was PHP 12,673.46 million compared to PHP 11,710.84 million a year ago.
Revenue was PHP 13,140.55 million compared to PHP 12,142.52 million a year ago.
Net income was PHP 8,532.81 million compared to PHP 8,362.11 million a year ago. Basic earnings per
share from continuing operations was PHP 1.013 compared to PHP 0.992 a year ago. Diluted earnings per
share from continuing operations was PHP 1.013 compared to PHP 0.992 a year ago.
Vistamalls, Inc. Reports Earnings Results for the Third Quarter and Nine Months Ended September
30, 2023
November 14, 2023 at 08:05 pm EST
Vistamalls, Inc. reported earnings results for the third quarter and nine months ended September 30, 2023.
For the third quarter, the company reported sales was PHP 3,373 million compared to PHP 2,380 million a
year ago. Revenue was PHP 3,522 million compared to PHP 2,606 million a year ago. Net income was PHP
1,748 million compared to PHP 1,674 million a year ago. Basic earnings per share from continuing
operations was PHP 0.207 compared to PHP 0.199 a year ago. Diluted earnings per share from continuing
operations was PHP 0.207 compared to PHP 0.199 a year ago.
For the nine months, sales was PHP 9,516 million compared to PHP 7,264 million a year ago. Revenue was
PHP 10,319 million compared to PHP 8,459 million a year ago. Net income was PHP 6,230 million
compared to PHP 5,096 million a year ago. Basic earnings per share from continuing operations was PHP
0.739 compared to PHP 0.605 a year ago. Diluted earnings per share from continuing operations was PHP
0.739 compared to PHP 0.605 a year ago.
Financial Analysis
Financial Ratios 2023 2022 2021
Profitability ratios
Return on equity 0.19 0.23 0.15
Return on assets 0.09 0.09 0.05
Liquidity ratios
Current ratio 0.43 0.44 0.37
Quick ratio 0.42 0.43 0.36
Leverage ratio
Debt-to-equity ratio 0.04 0.06 0.07
Efficiency ratios
Inventory turnover Not applicable. They do not maintain inventory
Receivables turnover 1.41 1.50 1.24
Industry and Market Analysis
STRENGTHS WEAKNESS
Brand Recognition: VMI enjoys strong brand Reliance on Domestic Market: VMI's
recognition within the Philippines, fostering dependence on the Philippine market makes
customer loyalty and trust. them vulnerable to domestic economic
Strategic Locations: VMI strategically locates fluctuations.
malls in high-density, high-income areas. This Limited Online Presence: Compared to
ensures a steady customer base and high foot competitors, VMI might have a weaker online
traffic. presence.
Diversified Tenant Mix: VMI curates a Competition: The Philippine retail landscape
diverse tenant mix with various retail is increasingly competitive, with local and
categories, entertainment options, and F&B international players emerging.
outlets. This caters to a wider range of
customer preferences, driving overall mall
revenue.
Expansion Strategy: VMI's consistent
expansion with new malls in promising
locations allows them to capture a larger
market share and potentially increase
profitability.
OPPORTUNITY THREATS
Evolving Consumer Trends: VMI can Economic Downturn: An economic downturn
capitalize on evolving consumer trends such as could negatively impact consumer spending,
hosting pop-up events and incorporating leading to decreased foot traffic and revenue.
AR/VR experiences. Shift Towards Online Shopping: The growing
Rising Disposable Income: The Philippines' popularity of online shopping platforms poses
economic outlook suggests rising disposable a threat to brick-and-mortar malls.
incomes Disruptions Due to Pandemics: The COVID-
Ventures into E-commerce: VMI's brand 19 pandemic highlighted the vulnerability of
recognition and physical presence offer a retail businesses to unforeseen events.
strong foundation for building an online
presence.
Vista Mall Inc. operates in the retail mall industry, which has several key benchmarks that reflect its
performance and competitive position such as:
Financial Performance:
- Revenue Growth: Vista Mall has consistently shown steady growth in its revenue, with a 2% increase in
2023 amid a thriving retail environment
- Rental Income: The company generates a significant portion of its revenue from rental income, which
increased by 8.22% from 2022 to 2023
Market Presence:
- Number of Locations: Vista Mall has over 30 locations nationwide, offering a wide range of products and
services.
- Tenant Mix: The company has a diverse tenant mix, including supermarkets, pharmacies, retail shops,
and other essential services, which contributes to its thriving community
Shareholder Structure:
- Major Shareholders: VISTA LAND & LIFESCAPES, INC. holds the largest stake in Vista Mall, with
88.34% of the company's shares
These benchmarks highlight Vista Mall's strong financial performance, extensive market presence, , and
robust shareholder structure, which collectively contribute to its competitive position in the retail mall
industry.
Valuation and Investment Recommendation
Discounted Cash Flows
Therefore, based on the cash flow from operating activities and the discount rate of 10%, the estimated
present value of future cash flows (DCF) for Vista Malls Inc is approximately 4,723.64 million PHP. This
value represents the intrinsic value of the company based on its projected cash flows and the discount rate.
Price-to-Earnings (P/E) Ratio
The calculated P/E ratio of approximately 12,938.51 suggests that investors are willing to pay approximately
12,938.51 times the company's earnings per share (EPS) for each share of Vista Malls Inc.
A high P/E ratio may indicate that the market has high expectations for the company's future earnings
growth or that the stock is currently overvalued.
Price-to-Book (P/B) Ratio
The calculated P/B ratio of approximately 0.466 indicates that investors are willing to pay approximately
0.466 times the company's book value per share for each share of Vista Malls Inc.
A high P/B ratio may suggest that the market values the company's assets more than its book value, which
could indicate growth prospects or intangible assets not reflected on the balance sheet
Recommendation
Based on the analysis, we recommend a cautious approach to investing in the company. The estimated DCF
valuation of 4,723.64 million PHP indicates significant intrinsic value based on future cash flows. However,
the extremely high P/E ratio of approximately 12,938.51 suggests that the market has very high expectations
for the company's future earnings growth, which could imply overvaluation. Conversely, the low P/B ratio of
approximately 0.466 might indicate potential undervaluation, suggesting the market values the company's
assets below their book value, possibly due to concerns about asset quality or liquidity. Given these mixed
signals, we recommend holding the stock and closely monitoring the company's performance, particularly its
ability to meet earnings expectations and generate projected cash flows. Further due diligence is advised to
assess the company's financial health, management quality, and growth prospects. If these aspects prove
favorable and market concerns about asset quality are alleviated, there may be a buying opportunity,
especially if the stock price becomes more attractive relative to the intrinsic value. Risk management
strategies, such as setting stop-loss orders and diversifying the portfolio, are also recommended to mitigate
potential losses due to market volatility.
Conclusion
In conclusion, Vistamalls, Inc. exhibits robust financial performance with consistent revenue and earnings
growth, underpinned by its strong brand recognition and strategic market positioning in the Philippine real
estate sector. However, the company's investment attractiveness is tempered by an exceptionally high price-
to-earnings (P/E) ratio, indicating lofty market expectations for future earnings growth, potentially signaling
overvaluation. Conversely, a low price-to-book (P/B) ratio suggests possible undervaluation relative to its
asset base. Investors are advised to approach with caution, closely monitoring Vistamalls' financial health,
management decisions, and market conditions. Implementing risk management strategies and assessing for
buying opportunities aligned with intrinsic value are prudent steps in navigating its dynamic market
landscape.
