WED 04 DEC 2019

Top Story
(AS OF DEC 03, 2019)
ACEPH: ACEPH signs share purchase agreement to acquire SACASOL and ISLASOL INDICES
Close Points % YTD%
PSEi 7,855.18 -22.01 -0.28 5.21
All Shares 4,681.20 -5.48 -0.12 3.62
Other News: Financials 1,880.14 2.09 0.11 5.63
Holding Firms 7,748.07 -31.99 -0.41 5.53
Industrial 9,675.60 -169.40 -1.72 -11.65
ABS: Duterte threatens anew ABS’ franchise renewal Mining & Oil 7,779.26 -16.48 -0.21 -5.14
MWC, MPI: Duterte threatens to sue water firms, seeks new water concession Property 4,152.64 20.26 0.49 14.46
Services 1,544.00 2.09 0.14 7.02
contracts
AC: AC buys 15% stake in YSH for US$108Mil Dow Jones 27,502.81 -280.23 -1.01 17.90
S&P 500 3,093.20 -20.67 -0.66 23.39
Nasdaq 8,520.64 -47.34 -0.55 28.41

Market Summary:
INDEX GAINERS

The local equities market fell on Tuesday, tracking the decline on Wall Street and most Ticker Company Price %
TEL PLDT Inc 1085.00 1.97
Asian markets, amidst increased global trade tensions. This was after US President Donald DMC DMCI Hldgs Inc 6.50 1.56
Trump announced tariffs on steel and aluminum imports from Brazil and Argentina. JGS JG Summit Hldgs Inc 79.00 1.28
SMPH SM Prime Hldgs Inc 40.50 1.25
SMC San Miguel Corporation 161.10 1.19
The PSEi declined 22.01 points or 0.27% to close at 7,855.18. The main drags were SM
(-1.02%), URC (-3.68%), JFC (-2.98%), AC (-1.13%), and SECB (-1.94%). On the other hand,
INDEX LOSERS
these were partially offset by gainers such as SMPH (+1.25%), JGS (+1.28%), ALI (+0.53%), Ticker Company Price %
TEL (+1.97%), and BPI (+0.98%). LTG LT Group Inc 11.00 -4.35
URC Universal Robina Corp 144.00 -3.68
JFC Jollibee Foods Corp 192.00 -2.98
Value turnover on Tuesday declined to Php5.1Bil from Php5.3Bil in the previous session. SCC Semirara Mining Corp 21.00 -2.78
Foreign investors turned net sellers, disposing Php155.9Mil worth of shares. RLC Robinsons Land Corp 25.40 -2.31

TOP 5 MOST ACTIVE STOCKS

Ticker Company Turnover
ALI Ayala Land Inc 519,886,100
BPI Bank of the Phil Islands 416,099,200
SM SM Investments Corp 251,668,600
AGI Alliance Global Inc 251,324,100
BDO BDO Unibank Inc 242,205,400

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 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 04 DEC 2019

Top Story:

George Ching
Senior Research Manager
ACEPH: ACEPH signs share purchase agreement to
acquire SACASOL and ISLASOL
AC Energy Philippine, Inc.
BUY
ACEPH signs share purchase agreement to acquire SACASOL and ISLASOL. ACEPH
Php3.12
disclosed that it has signed a share purchase agreement to acquire a 70% stake in San
Carlos Solar Energy Inc. (SACASOL) for Php2.78Bil, and a 70% stake in Negros Island
Solar Power Inc. (ISLASOL) for Php1.1Bil. SACASOL operate a 45MW solar farm in Negros
Occidental under the feed-in-tariff regime, while ISLASOL operate a 80MW solar farm,
also in Negros Occidental. The deals are subject to approval by the Philippine Competition
Commission and are expected to be completed on or before Mach 31, 2020.

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 ACEPH’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 Php2.49/sh, upside
to our FV estimate of Ph3.12/sh is at 25%.

Other News:

Research Analysts ABS: Duterte threatens anew ABS’ franchise renewal

John Martin Luciano
Frances Rolfa Nicolas President Duterte has renewed his threat to block the franchise renewal of media
Justin Richmond Cheng company ABS. Note that bills seeking to extend ABS’ franchise remain pending in the
Adrian Alexander Yu House of Representatives. Recall that the company’s franchise is set to expire on March
Kerwin Malcolm Chan
2020. (source: Inquirer)

COL Financial Group, Inc. 2

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 04 DEC 2019

MWC, MPI: Duterte threatens to sue water firms, seeks new

water concession contracts

President Duterte threatened to file a case of economic sabotage against MWC and
Maynilad due to alleged onerous provisions included in the concession contracts with
the two companies. This came after the Permanent Court of Arbitration in Singapore
ordered the government to pay MWC damages amounting to Php7.4Bil on account of
breach of obligation specified in the concession agreement. Note that back in 2017, the
arbitration tribunal also ordered the government to pay Maynilad Php3.4Bil damages on
the same issue. Moreover, the President ordered Finance Secretary Carlos Dominguez III
and Solicitor General Jose Calida to come up with a new water concession contract that
is favourable to the public and the government. (source: Inquirer)

AC: AC buys 15% stake in YSH for US$108Mil

AC disclosed that it has paid the first tranche of its US$237Mil investment in Myanmar’s
Yoma Group. AC paid US$108.6Mil for 14.9% of Singapore-listed firm, Yoma Strategic
Holdings (YSH). This deal is the first of two tranches with the second tranche worth
US$46.4Mil and representing 5.1% of YSH’s outstanding shares. Besides this deal with YSH,
AC is also investing in the Yoma Group’s First Myanmar Investment Public Co (FMI), which
is publicly listed in Myanmar. AC’s investment in FMI will involve a US$82.5 convertible
loan. Note that the Yoma group has overlapping business involvements in real estate,
power, financial services, automotives, and health care, among others. Furthermore, YSH
and FMI will serve as AC’s main gateway for strategic investments in Myanmar. (source:
BusinessWorld)

Change in Shareholdings:

COL Financial Group, Inc. 3

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

WED 04 DEC 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

CO L F IN ANC IAL G R O UP, IN C.

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EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
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WEBSITE: www.colfinancial.com

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