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February 10 To 21 2020 PDF
February 10 To 21 2020 PDF
February 10 To 21 2020 PDF
JUSTINO B. CALAYCAY, JR
Date : February 10 – February 21, 2020 VP-Head, Research & Traditional Sales
(632)8588-1962
SSI BUY
particular investor type, situation, or
objective and must not be taken as such.
Determining the suitability of an investment
remains within the province of the investor.
Last Traded Price P2.19 Our estimates are based on information we
Entry Point P1.80– P2.10 Earnings growth continues despite believe to be reliable. Nevertheless, nothing
in this report shall be construed as an offer
Target Price P3.17-P3.37
decreasing total floor area. of a guarantee of a return of any kind and at
any time.
Potential Upside / Downside 45%- 53% Undervalued in terms of P/E and
Net Foreign Position* P20.55 M P/B ratio.
Rating Definitions:
52 wk low and high 1.80 - 4.30 It may decline to its 52-week low. BUY - More than 15% upside base on the target price
in the next 9-12 months
20 MA Volume 2.015M
* YTD as of February 7, 2020
HOLD - 15% or less upside or downside in the next
P/E Ratio 9.83
9-12 months
P/B Ratio 0.64
SELL - More than 15% downside base on the target
YTD performance -21.22% price in the next 9-12 months
TRADE - A potential 10% and above short-term upside
base on entry price and selling price.
OUR TAKE
We recommend a TRADE on ACEPH amid the improving prospects of the firm. While current fundamentals are dismal, the continuous
expansion through acquisitions in line with its 2 GW renewable energy capacity target by 2025 sets the firm up for a bright future. Chartwise, the
share nears its 2.20 - 2.26 resistance range with the MACD showing a further rally is still possible. Risk however lies with the narrow gap
between the 50-day and 200-day EMA, an impending Death Cross which could lead to a bearish turnaround for the share. The best strategy is
to take positions once a breakout at the current resistance occurs, then trade up to its next resistance at P2.44.
FINANCIAL HIGHLIGHTS
5.00 10.00%
4.50
4.00
3.50
3.00
2018 2018
2.50 0.00%
2.00 2019 2019
1.50
1.00
0.50
0.00 -10.00%
Current Ratio Asset Turnover Debt to Asset Debt to Equity Equity Multiplier Operating Margin Net Margin ROA ROE
Source: Phinma Energy Corporation 3rd quarter/1st 9 month financial and operating results
The Philippine Competition Commission (PCC) has approved ACEPH’s plan to acquire Philippine Investment Alliance for Infrastructure
(PINAI)’s 27.07% stake in Philippine Wind Holdings Corporation which owns 67% of the 81 MW wind farm powered North Luzon
Renewables Corporation.
ACEPH is also acquiring PINAI’s full ownership interest on Negros Island Solar Power, Inc. and San Carlos Solar Energy, Inc. Both operate
a solar farm in Negros Occidental, the former 80 MW, the latter 45 MW. The acquisition would involve each firm’s 70% of the outstanding
capital stock subject to PCC’s approval.
TECHNICAL ANALYSIS
ACEPH is trying to regain momentum, bouncing from its 1.95 support after declining from its October 21, 2019 peak of 2.89. The share’s
initial challenge would be to take its 2.20 - 2.26 resistance range where its 200-day exponential moving average (also a dynamic
resistance) lies.
The crossing of the MACD line above the signal line implies that the upward momentum would be sustained.
The OBV, albeit flattened since the middle of October 2019, still shows an accumulation bias. The 14-day RSI, is also building up
RISKS
Volatility in energy prices with a downward bias as the economy faces early year headwinds led by the Coronavirus’ impact.
Capital intensive nature of business which could squeeze net cash flows.
An impending Death Cross on the ACEPH’s charts which would signal a bearish turnaround if it pushes through.
OUR TAKE
We recommend a TRADE for AGI since we are seeing short-term upside given by its technical signals and also Net Foreign transaction reveals
that despite the issue on the POGO and its effect in the casinos of Corona Virus ,for the past nine trading days it has registered buying,
indication that the recent bounce of AGI may be sustainable for the short-term. We also reiterate a BUY recommendation for AGI since it has
strong fundamentals. This is advised for investors looking for long0term position (accumulate and short term position (range trade).
Balance Sheet (In Million PHP except per share) September 30, 2019 December 31, 2018 % Change
Total Assets 609,369.83 588,251.19 3.59%
Total Liabilities 313,447.16 297,678.53 5.30%
Total Equity 295,922.66 290,572.66 1.84%
Retained Earnings (Deficit) 130,359.86 117,531.88 10.91%
Book value per Share (BVPS) 30.13 29.31 2.80%
Income Statement (In Million PHP except per share) 9M 2019 9M 2018 % Change
FINANCIAL HIGHLIGHTS
Attractive valuations also in favor for AGI since it has been on its 3 year low and also below the average of 14x against its peers
considering that 9M 2019 results were strong results from topline to bottom line figures
Driven by the strong demand coming from Philippine Offshore Gaming Operators (POGO) and retails space, we think that if this will
continue earnings for AGI will grow
TECHNICAL ANALYSIS
We see a trading range from 10.40 - 12.00 which investors can take advantage the short term upside of the share price movement
Net Foreign transactions reveals that the recent bunce off of AGI may be sustained given that the smart money has been slowly kicking in
OBV shows accumulation but caveat if net foreign transaction turns to selling.
RSI also nearing its oversold levels signaling a bounce for AGI
If 10.18 cutloss price is broken, we can expect that AGI may go down to below 10.00 levels
RISKS
If POGO issue will escalate and turns to total ban then this would have an adverse effect on the office market since FY 2019 data shows that
it has already tover taken IT-BPO has the highest take for the FY 2019. This will not just for AGI but also property companies with dealing
with POGO
If coronavirus issue will not normalize this will have a negative effect on casinos since majority of the players were foreigners and also for
tourism since AGI has hotel exposure
Regulatory risk is also a main issue just like in ALI, if the government will scrutinize dealing of property companies with the government. If
BGC will be under review then we think this will have a negative sentiment for AGI and MEG.
OUR TAKE
BUY SSI given the continuous positive trend of its top line and bottom line growth. It is already undervalued in terms of P/E and P/B ratio.
Foreigners are still buyers on year-to-date’s basis. However, technical shows that it may further decline to its 52-week low of P1.80.
Balance Sheet (In Million PHP except September 30, 2019 December 31, 2018 % Change
FINANCIAL HIGHLIGHTS
Positive trend continues with strong top line and bottom line driven by the healthy consumer demand, despite the 3% decline in its total
floor area. It focuses on store openings on developed brands in developed locations.
TECHNICAL ANALYSIS
It broke its support of P2.35, and went down to its second support at P2.10.
Test BUY at this level, then wait if this returns above P2.35 or fall to the psychological support of P2.00.
RSI (14) is already at the oversold level; Historical data of SSI shows that most of the time, share price climbs after reaching oversold level.
RISKS
Revenue growth may be affected negatively by decreasing gross selling space and number of stores.
It may decline to its 52-week low of P1.80, if P2.10 support does not hold.