SAINT PAUL UNIVERSITY PHILIPPINES

TUGUEGARAO CITY

In partial fulfilment of the

requirements for the subject of
Investment Theory and Analysis

By

BABY JINKY A. ZINAMPAN

SUBMITTED TO:

CHARITO M. GUILLERMO
I. Introduction

In order to build your wealth, you will want to invest your money. Investing allows
you to put your money in anything that you want that have the potential to earn
strong rates of return. If you don’t invest, you are missing out on opportunities to
increase your financial worth. Of course, you have the potential to lose your money
in investments, but if you invest wisely, the potential to gain money is higher than if
you never invest. Invest to grow money, save for our own retirement, earn higher
returns, and reach your financial goals and many more.

Stock market in Philippines is now considered a good investment in Philippines for

OFWs because workers will be ensured that all their hard work abroad will pay off and
will grow more without doing a lot of physical work.

Stocks are shares of ownership in a corporation. The stock market is a place where
stocks are bought and sold. The Philippine Stock Exchange (PSE) is the corporation
that governs our local stock market. People buy or invest in stocks to benefit from a
company's tremendous value potential over time. Once you buy or invest into a stock
you now become part owner or a shareholder of that particular corporation.

History has proven that investing in quality stocks can provide greater returns than
most investment instruments. This offers you the best chance in achieving your
financial goals and gives you the ability to later enjoy the benefits of your money
working for you. The track record of the stock market also shows that a good basket
of stocks climb more often than decline - reducing risk over the long-term.

Thus, in choosing investments you should know your needs and goals, consider how
long you want to invest and decide how hands on you be. Also you should diversify
and know how risky you are. For me, I am into medium risk with long term goal. I am
 choosing Banco De Oro because of their great fundamental analysis. Thus, they are
the top local banks in the Philippines and is largest in terms of assets and loans.

II. Background of the Company

BDO Unibank, Inc. (BDO), formerly Banco De Oro Unibank Inc., is a full service
universal bank. The bank is a member of SM Group. BDO provides commercial,
corporate, investment and retail banking services. The bank offers a wide range of
banking products and services, which include retail banking, lending services such as
corporate, commercial, consumer, and SME, treasury, trust, credit cards, corporate
cash management and remittances. Through its subsidiaries, the bank provides
leasing and financing, investment banking, private banking, bancassurance, insurance
brokerage and stock brokerage services. In addition to the Philippines, the bank has
operations in Hong Kong, Deutschland, the Netherlands, Italia and the US. The bank
operates a network of more than 740 branches and 1,600 ATMs. The bank is
headquartered in Makati, Philippines.

The Company's local subsidiaries include BDO Private Bank, Inc.; BDO Leasing and
Finance, Inc.; BDO Capital & Investment Corporation; BDO Nomura Securities, Inc.;
and BDO Insurance Brokers, Inc. The Company also has foreign subsidiaries in Hong
Kong; USA; Japan; Europe; Germany; and Canada. The Company's associates are
Manila North Tollways Corporation; SM Keppel Land, Inc.; Northpine Land
Incorporated; Taal Land, Inc.; and MMPC Auto-Financial Services Corporation.

As of December 31, 2017, BDO has 1,179 operating domestic branches, one branch in
Hong Kong and 4,022 automated teller machines and 428 cash accept machines.
III. SWOT of the Company (Comprehensive)

Being the premier universal bank in the country, BDO has utilized its strengths in
building customer loyalty throughout the years. With their slogan, “We Find Ways”,
the bank has been able to build a strong customer base to the extent of operating in
extensive banking hours. BDO is capable of meeting the customers’ needs efficiently
with the use of advanced technology. This allowed the company to diversify and
innovate its services through offering loans and deposits, payments and settlement
services, asset management, investment banking, dealership and brokerage,
insurance services, etc. In addition, BDO has a firm and competent management
operated by the Sy family, which pioneered the establishment of SM Malls. However,
due to its limited international presence, BDO has not yet expanded into most of the
geographical areas of the ASEAN region. The bank has also limited presence in rural
areas, and some branches pose inconsistencies with regard customer services. Also, a
big threat to BDO would be the tight competition in the market, with Bank of the
Philippine Islands (BPI) and Metropolitan Banking Corporation (Metrobank) as its
close competitors. The competitors of BDO in the market are not just confined in
domestic financial institutions but also in foreign banks. This can be due to the
increase of the presence of foreign banks as there is an existence of foreign bank
liberalization act. Other external factors contributing to the threats of BDO includes
government regulation. The bank is regulated by laws and the government is in
control when it comes to tax implementations; the Bangko Sentral ng Pilipinas (BSP),
on the other hand, determines the interest rates which affects the bank’s profits.

On a lighter note, the weaknesses and threats currently experienced by the BDO can
be transformed into opportunities and later on, become strengths of the company.
BDO can expand their company to foreign markets by taking advantage in the ASEAN
integration since global tie-ups can boost the bank’s presence abroad. Another
effective option would be to merge with other banks. BDO could also increase its
 exposure in the Philippines, especially to rural areas to create new and loyal
customers. Instead of focusing internationally, the bank can focus on the local level
first and strengthen the market, then gradually increase exposure afterwards. BDO
can overcome its tight competitors by continuously improving and innovating its
product and services. Through this, the bank’s market shares would progressively
improve soon after.

The SWOT matrix presented in the Table shows that BDO has more strengths that it
could use to counter the threats, especially its competitors. The company can
maximize its strengths and eliminate weaknesses through expansion and wide
customer base. Using these abilities, it can also maximize the opportunities that come
with the ASEAN integration.

STRENGHT WEAKNESS OPPORTUNITIES THREAT

1. Threats Tight
1. Advanced 1. Expansion to foreign
1. Technology competition in the
technology markets
market
2. Limited presence in 2. Merge with other 2. No substitute for
2. Customer loyalty
the rural areas banks financial services
3. Strong and
3. Inconsistencies in 3. Increase exposure in 3. Increased amount of
competent
customer services the Philippines foreign banks
management
4. Diverse and 4. Government
innovative regulation

5. Services extensive
5. ASEAN integration
banking hours
 IV. Basis of your decision to invest

FUNDAMENTAL ANALYSIS

Banco De Oro

Product BDO offers an array of products and services, i.e.

retail banking; lending (corporate, commercial,
consumer, and SME); treasury; trust; credit cards;
corporate cash management; and remittances.

EPS 7.455372

Dividend Growth no data

Low Payout Ratio 0.000000009

Debt ratio 0.891422177

Treasury Stocks no data

Stocks undervalued Undervalued

P/E Ratio 17.53351206

Dividend yield rate 0.002293578

P/B Ratio 1.775485272

 BANCO DE ORO

Item 2018

Total Assets 3,022,247,000

Total Liabilities 2,694,098,000

Retained Earnings/(Deficit) 156,327,000

Stockholders' Equity 328,149,000

Stockholders' Equity – Parent 327,372,000

Book Value Per Share 73.67

Market Price Volume

BANCO DE ORO 130.8 4,000,600

V. How will you benefit from such investment

Saving is, and always will be, the foundation of any fortune. It is secure, risk-free and
readily accessible. But saving alone is not enough to make your money grow. You
should also invest. This means taking some risks, but the rewards are higher. When
you save and invest, your money has the power to grow faster. One reason that
motivates me as investor to invest in stocks is capital appreciation and meet my
financial goals. I want my money to grow in value over time.

VI. Conclusion

BDO is a full-service universal bank in the Philippines. It provides a complete array of

industry-leading products and services including Lending (corporate and consumer),
Deposit-taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards,
Corporate Cash Management, and Remittances in the Philippines.

Based on the fundamental analysis of the bank, as an investor I want to put an

investment to the company. Because financially it is doing very well and it is expected
that it would be here in the long run. Thus the price per earnings ratio below 20 is
better deal than more than 20.