TRADERS’ TAKEDOWN

13 March 2020

Stories for the Day WATCHLIST

 Ayala group 2019 profit up 11% 12-Mar CHG (%)
 Max’s bottom line rises by 14.8% PSEi 5,736.27 (9.71%)
 Good news for Manila Water customers, not so good for Maynilad DJIA 21,200.62 (9.99%)
 Axelum profits double last year S&P 500 2,480.64 (9.51%)
NASDAQ 7,201.80 (9.43%)
Stock Feature: Max’s Group USDPHP 50.85 0.61%
Source: PSE, Bloomberg, BSP
We view MAXS's results as neutral. MAXS's FY19 profits rose 15% YoY to
Php724M, coming in line at 99% of our full year forecast (102% of consensus).
Full year sales increased 5.3% YoY to Php14.4B (100% of BPI's) as MAXS INDEX MOVERS
benefitted from its partnerships with food aggregators where delivery sales grew INDEX GAINERS INDEX LOSERS
by 20% YoY. Moreover, MAXS's commissary sales increased 14% while its SCC (16.42%)
franchising revenues increased by 1% YoY. In 4Q19, MAXS's sales increased 6.5% JGS (14.64%)
YoY while its profits jumped 27% to Php230M as the company's high A&P spend RLC (13.88%)
in 3Q19 bore fruit. All told, while MAXS's results came in line with our MPI (12.57%)
expectations, we reckon that MAXS and other restaurant operators face SM (12.22%)
continued uncertainty moving forward in light of the COVID-19 situation that Source: PSE, Bloomberg, BSP
threatens to dampen demand on dining out. However, given that MAXS has
embraced food aggregators such as GrabFood, the company is well-equipped
to capture the increase in demand towards delivery sales. We currently have a
BUY on MAXS.

Daily Trading View

The PSEi (-9.7%) plummeted yesterday and triggered the circuit breaker (15-
minute trading halt when PSEi falls by 10% or more) for the first time since 2008.
We expect the selloff to continue today for local markets given the extended
decline in US markets (Dow -9.99%, S&P -9.51%, Nas -9.43%) and the
government’s decision to lock down Metro Manila.

BPITRADE TOP PICKS (TOP BUY RECOMMENDATIONS)

12 Month Short-Term Technical 3 MO

STOCK
LAST PRICE % Upside Perf REASONS
PICK
Price Target Entry Exit (%)

MEG 2.90 5.40 86.2% 3.38 4.07 (31.8%) Valuations attractive as POGO risk priced in

Beneficiary of healthy consumption at

PGOLD 32.55 51.50 58.2% 30.00 40.50 (17.1%)
undemanding valuations
Recovery on track, defensive fixed line business vs.
TEL 980.00 1,500.00 53.1% 978.50 1,133.00 (1.8%)
Dito, attractive dividend yield

*Entry and Exit Prices are based on the recommendations of BPI Securities Active Advisory Group
*Ratings and Price Targets are based on the recommendations of BPI Securities Research Department

This is a product of the BPITrade Sales and BPITrade Research Team. See Appendices for Analyst Certification and important disclosures. 1
BPI Traders’ Takedown – 13 March 2020
BPI SECURITIES VALUATION TABLE
LAST % UPSIDE / FY20F Div FY20F ROE FY20F EPS
TICKER RATING TARGET PRICE FY20F P/E FY19F P/B
PRICE (DOWNSIDE) Yield (%) (%) Growth
ALI 33.90
AP BUY 42.60 25.20 69.0% 8.3 1.3 5.0% 15.1% 15.6%
BDO HOLD 140.00 120.00 16.7% 12.6 1.5 1.0% 11.1% 6.3%
BLOOM BUY 12.00 6.35 89.0% 7.9 2.4 3.3% 18.0% (10.7%)
CHIB BUY 36.50 21.00 73.8% 5.7 0.6 4.4% 10.0% 18.4%
CIC BUY 54.00 25.00 116.0% 8.2 1.2 3.5% 19.2% 13.4%
CLI BUY 6.00 4.28 40.2% 2.9 0.5 5.8% 28.2% 22.3%
CNPF BUY 20.00 13.00 53.8% 12.6 2.4 1.7% 17.7% 14.4%
DMC HOLD 16.10 4.88 229.9% 6.4 0.7 7.0% 16.1% 12.2%
DMW BUY 11.50 7.32 57.1% 11.6 1.2 2.7% 10.0% 23.5%
DNL BUY 9.70 5.66 71.4% 12.6 2.3 1.8% 17.9% 9.8%
EMP HOLD 6.70 8.38 (20.0%) 18.7 2.0 1.8% 10.5% 5.9%
EW BUY 14.00 9.00 55.6% 4.1 0.4 3.1% 10.0% 15.6%
FB HOLD 115.00 61.80 86.1% 15.1 2.4 4.1% 14.5% 13.3%
GLO HOLD 2,150.00 1,739.00 23.6% 11.1 2.9 6.0% 25.7% 7.4%
GTCAP BUY 1,025.00 580.00 76.7% 7.3 0.7 4.0% 9.7% 17.9%
ICT BUY 163.50 80.05 104.2% 9.6 1.7 3.5% 17.8% 38.4%
IMI HOLD 13.50 4.31 213.2% 4.8 0.4 4.9% 8.4% 27.4%
JFC HOLD 240.00 153.00 56.9% 24.1 3.2 1.3% 18.2% 15.0%
LTG BUY 24.00 7.90 203.8% 3.8 0.4 2.5% 9.1% 11.2%
MAC BUY 22.80 5.80 293.1% 7.1 1.4 2.8% 17.9% 17.7%
MAXS BUY 18.00 5.80 210.3% 5.5 0.7 3.4% 12.7% 11.7%
MBT BUY 79.65 43.35 83.7% 5.4 0.6 2.0% 10.0% 18.6%
MEG BUY 5.40 2.90 86.2% 5.1 0.6 2.8% 10.3% 7.5%
MER HOLD 375.00 230.20 62.9% 10.7 2.9 7.3% 26.5% 3.0%
MPI BUY 6.35 3.06 107.5% 5.7 0.4 4.1% 9.4% 10.2%
MRSGI BUY 3.00 1.40 114.3% 6.3 0.5 4.2% 7.7% 35.6%
MWC HOLD 28.90 9.96 190.2% 3.1 0.4 10.1% 11.0% 11.6%
MWIDE BUY 21.85 11.50 90.0% 12.2 1.2 0.0% 15.0% (9.0%)
PIZZA BUY 15.15 6.85 121.2% 10.1 2.0 1.9% 18.1% 13.3%
PGOLD BUY 51.50 32.55 58.2% 12.3 1.4 1.3% 11.2% 14.8%
PNB BUY 60.00 25.60 134.4% 3.1 0.2 0.0% 7.4% 18.6%
RCB HOLD 27.00 18.40 46.7% 6.5 0.4 2.5% 6.0% 24.1%
RLC BUY 28.00 18.00 55.6% 9.3 0.9 2.4% 9.6% 13.5%
RRHI BUY 90.00 52.00 73.1% 15.2 1.1 1.3% 6.7% 16.0%
SCC BUY 27.50 14.46 90.2% 4.2 1.5 6.3% 28.7% 19.9%
SECB HOLD 185.00 126.00 46.8% 8.1 0.8 2.4% 9.6% 12.8%
SM HOLD 900.00 790.00 13.9% 19.1 2.5 1.3% 12.3% 17.8%
SMPH BUY 42.50 30.90 37.5% 20.5 2.9 1.3% 13.4% 12.7%
SHLPH HOLD 50.50 22.30 126.5% 6.5 0.9 10.2% 13.2% 12.5%
TEL BUY 1,500.00 980.00 53.1% 9.7 2.0 7.3% 16.9% 2.1%
UBP HOLD 68.00 56.50 20.4% 8.2 0.7 3.4% 8.6% 7.9%
URC HOLD 145.00 116.00 25.0% 22.1 2.8 2.4% 12.4% 6.5%
WLCON HOLD 19.00 14.34 32.5% 24.3 4.0 0.8% 15.3% 18.0%
Average 53.5% 9.9 2.0 2.4% 12.1% 10.0%
Source: PSE, Bloomberg, BSP
Rating System: Buy (>10% Upside); Hold (-10% Downside to +10% Upside); Sell (>10% Downside)

SECTOR VALUATION
FY19F
% Upside / PT Implied PT Implied Forward Current FY19F Div FY18F
SECTOR Rating YoY
(Downside) FY19F P/E P/B P/E P/B Yield ROE
Growth
Banking BUY 41.6% 16.0 1.3 10.3 1.1 1.8% 9.5% 16.9%
Conglomerate BUY 55.2% 24.2 2.4 16.0 1.9 1.9% 11.2% 15.8%
Consumer BUY 52.6% 31.1 3.7 20.1 2.7 3.9% 13.6% 5.3%
Gaming BUY 89.0% 18.5 4.4 7.0 2.9 0.0% 21.5% 38.9%
Infrastructure BUY 90.0% 23.2 2.2 11.1 1.3 0.0% 13.8% 10.6%
Power BUY 74.3% 12.9 2.3 8.4 1.4 8.4% 21.7% (6.8%)
Property BUY 46.4% 31.8 3.7 18.5 2.7 1.2% 13.3% 20.1%
Services BUY 119.7% 25.8 3.5 10.1 1.5 3.1% 13.6% 25.3%
Telco BUY 37.7% 16.1 3.3 11.0 2.5 6.4% 21.9% 7.5%
Utility BUY 72.2% 18.3 4.5 10.5 2.9 7.7% 27.9% 5.4%

RESEARCH TEAM
Jeo Consunji – Consumer, Industrials, Gaming, Property Miguel Sevidal – Telco, Transport, Gaming
Raphy del Callar – Infrastructure, Services, Retailers, Banking

This is a product of the BPITrade Sales and BPITrade Research Team. See Appendices for Analyst Certification and important disclosures. 2
BPI Traders’ Takedown – 13 March 2020
CORPORATE NEWS
Ayala group 2019 profit up 11%
Conglomerate Ayala Corp. grew its net profit last year by 11 percent to Php35.3B as robust property, banking and telecom businesses
plus large divestment gains made up for the sharp devaluation of its water business and losses from its industrial business. Excluding
one-off items, Ayala’s core profit for 2019 amounted to Php31.1B, up by 3 percent from the previous year, Ayala Chief Financial Officer
Teodoro Limcaoco said in a text message. Core earnings were mostly driven by its property, banking and telecom businesses. Ayala
generated Php23.6B in divestment gains from AC Education and AC Energy in 2019 but financial results were tempered by a hefty
Php18.1B loss from the lower valuation of its interest in water concessionaire Manila Water Co. as well as the Php2.4B in losses incurred
by AC Industrials. Ayala’s core businesses—property, banking and telecom businesses—all posted double-digit growth in profits in
2019. Ayala Land’s profit grew by 13 percent to Php33.2B while those of Bank of the Philippine Islands and Globe Telecom were up by
25 percent and 20 percent to Php28.8B and Php22.3B, respectively. AC Energy posted a profit of Php24.6B while AC Industrials recorded
net loss of Php2.4B.

Max’s bottom line rises by 14.8%

Leading local casual dining group Max’s Group Inc. (MGI) grew its net profit last year by 14.8 percent to Php724.23M as robust food
delivery sales complemented higher restaurant sales, commissary and franchising revenues. For the fourth quarter alone, net profit
surged by 27.1 percent year-on-year to Php229.45M on the back of a 6.5-percent year-on-year growth in revenue to Php3.97B. These
results reflected new accounting standards, the Philippine Financial Reporting Standards 16, under which a right of use asset is
recognized and amortized over the lease term while interest expense is incurred on the lease liability. For the full year, systemwide sales
rose by 7 percent to Php20.11B, driving a 5.3-percent improvement in revenues to Php14.4B. Apart from its flagship Max’s Restaurant,
MGI’s family of brands include Pancake House, Yellow Cab Pizza, Krispy Kreme, Jamba Juice, Max’s Corner Bakery, Teriyaki Boy, Dencio’s,
Sizzlin’ Steak, Maple, Kabisera, Le Coeur de France and Singkit. In 2019, MGI opened a total of 82 new stores, including 22 overseas. This
brought the company’s total store network to 760 locations, with 70 situated across various locations in North America, the Middle East
and Asia.

Good news for Manila Water customers, not so good for Maynilad
Customers of Manila Water Co. Inc. will enjoy a relief in their monthly bills in the next three months while those of Maynilad Water
Service Inc. will see a slight increase due to the quarterly foreign currency differential adjustment (FCDA). The FCDA is a rate-setting
mechanism that enables the two concessionaires of the Metropolitan Waterworks and Sewerage System (MWSS) to recover from or
give back to customers funds lost or gained due to fluctuations in the value of the peso against foreign currencies. Both Manila Water
and Maynilad may enjoy gains or sustain losses as they service concession loans—used to improve their services and operations—that
are denominated in foreign currencies. According to the MWSS Regulatory Office, this year’s second-quarter FCDA means that Manila
Water will adjust for a gain of 48 centavos per cubic meter, which is 21 centavos less than the 69 centavos that was given back to
customers in the first quarter of 2020.

Axelum profits double last year

Coconut products manufacturer Axelum Resources Corp. (Axelum)reported doubling its net income in 2019, driven by improved gross
margins despite lower revenues. The listed firm said in a statement yesterday its net income last year jumped 113% to Php775.60M,
despite a 10% drop in revenues to Php5.30B. The sales decrease was attributed to a global decline in vegetable oil prices, which reduced
the company’s average selling rates. But its bottomline was cushioned from its impact due to an improved gross margin of 29% from
23%. “[The improved gross margin is] a result of on-going efforts intended to leverage on operational efficiencies, streamline processes
and optimize production costs,” Axelum said. Operating expenses clocked in at Php297M, with net income margin rising to 15% from
6% in 2018. “The year 2019 was a transformational period for Axelum as it transitioned from a private homegrown company into a
publicly-listed entity,” Axelum President and Chief Operating Officer Henry J. Raperoga said in the statement.

This is a product of the BPITrade Sales and BPITrade Research Team. See Appendices for Analyst Certification and important disclosures. 3
BPI Traders’ Takedown – 13 March 2020

DIVIDENDS SCHEDULE
Type of Ex-Dividend Payment
Ticker Company Name Dividend Rate
Dividend Date Date

T APB2R Ayala Corporation Cash Php6.02675 07/30/2020 08/29/2020

ACPB1 Ayala Corporation Cash Php6.56250 04/15/2020 05/15/2020

APB2R Ayala Corporation Cash Php6.02675 04/29/2020 05/29/2020

AEV Aboitiz Equity Ventures, Inc. Cash Php1.30 03/17/2020 04/03/2020

AP Aboitiz Power Corporation Cash Php1.18 03/17/2020 04/03/2020

BLOOM Bloomberry Resorts Corporation Cash Php0.25 03/18/2020 03/31/2020

CLI Cebu Landmasters, Inc. Cash Php0.25 03/31/2020 04/30/2020

DMC DMCI Holdings, Inc,. Cash Php0.25 03/18/2020 04/03/2020

DMC DMCI Holdings, Inc,. Cash Php0.23 03/18/2020 04/03/2020

GTPPB GT Capital Holdings, Inc. Cash Php12.73725 03/31/2020 04/27/2020

GTPPA GT Capital Holdings, Inc. Cash Php11.57475 03/31/2020 04/27/2020

GTPPB GT Capital Holdings, Inc. Cash Php12.73725 06/30/2020 07/27/2020

MER Manila Electric Company Cash Php5.108 03/17/2020 04/15/2020

MER Manila Electric Company Cash Php5.287 03/17/2020 04/15/2020

GTPPA GT Capital Holdings, Inc. Cash Php11.57475 06/30/2020 07/27/2020

TEL PLDT Inc. Cash Php39.00 03/16/2020 04/03/2020

SMC2C San Miguel Corporation Cash Php1.50/shr 03/17/2020 04/03/2020

SMCP1 San Miguel Corporation Cash Php1.0565625/shr 03/17/2020 04/03/2020

SMC2I San Miguel Corporation Cash Php1.18790625 03/17/2020 04/03/2020

SMC2H San Miguel Corporation Cash Php1.1854125/shr 03/17/2020 04/03/2020

SMC2G San Miguel Corporation Cash Php1.233361875/shr 03/17/2020 04/03/2020
SMC2F San Miguel Corporation Cash Php1.27635/shr 03/17/2020 04/03/2020

SMC2E San Miguel Corporation Cash Php1.8603125/shr 03/17/2020 04/03/2020

SMC2D San Miguel Corporation Cash Php1.11433125/shr 03/17/2020 04/03/2020
WLCON Wilcon Depot, Inc. Cash Php0.06 03/17/2020 04/16/2020

WLCON Wilcon Depot, Inc. Cash Php0.12 03/17/2020 04/16/2020

This is a product of the BPITrade Sales and BPITrade Research Team. See Appendices for Analyst Certification and important disclosures. 4
BPI Traders’ Takedown – 13 March 2020
APPENDIX | GENERAL DISCLAIMER
The information contained herein is based on information obtained from sources considered to be reliable, but does
not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or
correctness for any purpose. All the charts and graphs are taken from publicly available sources or derived from
proprietary data. Expressed opinions may be subject to change without prior notice. Any recommendation contained
herein does not pertain to any specific investment objectives, financial situation and the particular needs of any
addressee.

The information herein is published for the information of addressees only and is not to be taken in substitution for
the exercise of judgment by addressees who should obtain separate legal or financial advice. The Company or any
of its related companies or any individuals connected with the group accepts no liability for any direct, special,
indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the
information herein (including any error, omission or misstatement herein, negligent or otherwise) or further
communication thereof, even if the Company or any other person has been advised of the possibility thereof.

The information herein is not to be construed as a solicitation to buy or sell any securities, or currency mentioned
therein. The information herein is not intended for distribution to, or use by, any person or entity in any jurisdiction
or country where such distribution or use would be contrary to law or regulation.

Sources:

www.bloomberg.com, www.cnn.com, www.cnbc.com, www.bsp.gov.ph, www.pse.com.ph, www.inquirer.net,

www.bworldonline.com, www.philstar.com, www.interaksyon.com, www.abs-cbnnews.com,
www.thestandard.com.ph, www.mb.com.ph, www.manilatimes.net, www.malaya.com.ph, www.gmanetwork.com,
www.businessmirror.com.ph

This is a product of the BPITrade Sales and BPITrade Research Team. See Appendices for Analyst Certification and important disclosures. 5
BPI Traders’ Takedown – 13 March 2020
APPENDIX | SALES DISCLAIMER
This report was prepared
APPENDIX | SALESbyDISCLAIMER
a sales function within BPI Securities Corporation (“BSC”). Any opinions expressed
herein are solely those of the author and may be different from the views expressed by BSC itself and its other
departments, including the research department. Sales functions are subject to potential conflicts of interest which
the other BSC departments, including the research department, do not encounter.

This report is published for the information of the recipients only. This report is not to be construed as a solicitation
to buy or sell any securities, futures, options or other financial instruments, to participate in any particular trading
strategy or to provide any investment advice or services. Any recommendation contained herein does not pertain
to any specific investment objectives, financial situation and the particular needs of any recipient.

BSC is not a deposit-taking institution and their obligations or liabilities do not represent the obligations or liabilities
of the Bank of the Philippine Islands ("BPI"). Securities and other financial instruments discussed, recommended,
offered, or sold by BSC: (a) are not insured by the Philippine Deposit Insurance Corporation; (b) are not deposits or
other obligations of any insured depository institution (including BPI); and (c) are subject to investment risks,
including the possible loss of the principal amount invested.

BSC may deal or transact in a manner inconsistent with the views discussed in this report. BSC trades or may trade
as principal in the instruments mentioned herein. BSC, its directors, officers and/or employees may have positions
or other interests in, and may effect transactions in, securities mentioned in this report. BSC may make a market in
the instruments discussed herein. The author of this report may know the nature of such positions and strategies.

The assumptions, estimates and opinions expressed in this report are the author's judgment as of the date hereof
and are subject to change without notice. Although this report is based on information obtained from sources
considered to be reliable as of the date hereof, the author does not make any representation or warranty, express
or implied, as to its accuracy, timeliness or completeness for any purpose. Any information is subject to change
without notice and the author is not under any obligation to update or keep current the information contained
herein.

Certain transactions or securities in this report are subject to substantial risk and are not appropriate for all investors.
Past performance is not necessarily a guide to future performance. BSC deals with counterparties on an arm's length
basis. BSC assumes that each counterparty is capable of making an independent evaluation of the merits and risks
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BSC does not render legal, tax or financial advice, and the information contained in this report should not be
considered as such and should not be taken in substitution for the exercise of judgment by the recipient who should
obtain separate legal, tax or financial advice. No liability whatsoever is accepted for any direct, special, indirect,
consequential, incidental damages or any other loss or damages of any kind arising from any use of the information
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BPI Traders’ Takedown – 13 March 2020
APPENDIX | RESEARCH DISCLAIMER
This report was prepared by an analyst(s) of BSC. Any opinions expressed herein are solely those of the author and
may be different from the views expressed by BSC itself and its other departments.

This report is published for the information of the recipients only. This report is not to be construed as a solicitation
to buy or sell any securities, futures, options or other financial instruments, to participate in any particular trading
strategy or to provide any investment advice or services. Any recommendation contained herein does not pertain to
any specific investment objectives, financial situation and the particular needs of any recipient.

BSC is not a deposit-taking institution and their obligations or liabilities do not represent the obligations or liabilities
of the Bank of the Philippine Islands ("BPI").

Securities and other financial instruments discussed, recommended, offered, or sold by BSC: (a) are not insured by the
Philippine Deposit Insurance Corporation; (b) are not deposits or other obligations of any insured depository
institution (including BPI); and (c) are subject to investment risks, including the possible loss of the principal amount
invested.

BSC may deal or transact in a manner inconsistent with the views discussed in this report. BSC trades or may trade as
principal in the instruments mentioned herein. BSC, its directors, officers and/or employees may have positions or
other interests in, and may effect transactions in, securities mentioned in this report. BSC may make a market in the
instruments discussed herein. The author of this report may know the nature of such positions and strategies.

The author(s) has received assistance from the subject company in this report including but not limited to meetings
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The assumptions, estimates and opinions expressed in this report are the author’s judgment as of the date hereof and
are subject to change without notice. Although this report is based on information obtained from sources considered
to be reliable as of the date hereof, the author does not make any representation or warranty, express or implied, as
to its accuracy, timeliness or completeness for any purpose. Any information is subject to change without notice and
the author is not under any obligation to update or keep current the information contained herein.

Certain transactions or securities in this report are subject to substantial risk and are not appropriate for all investors.
Past performance is not necessarily a guide to future performance. BSC deals with counterparties on an arm’s length
basis. BSC assumes that each counterparty is capable of making an independent evaluation of the merits and risks of
each, and an independent decision on any, transaction.

BSC does not render legal, tax or financial advice, and the information contained in this report should not be
considered as such and should not be taken in substitution for the exercise of judgment by the recipient who should
obtain separate legal, tax or financial advice. No liability whatsoever is accepted for any direct, special, indirect,
consequential, incidental damages or any other loss or damages of any kind arising from any use of the information
herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication
thereof.

This is a product of the BPITrade Sales and BPITrade Research Team. See Appendices for Analyst Certification and important disclosures. 7