I Philippine Equity Research Daily Notes

Thursday, 21 March 2024

TOP STORIES:
Indices
• FGEN: FY23 recurring earnings in line with forecast Close Points % YTD%
• ACEN: ACEN enters into property-for-share swap with AREIT PSEi 6,856.77 8.34 0.12 6.31
All Shares 3,572.10 5.62 0.16 4.31
• BEL, PLC: BEL sets PLC tender offer price at Php0.85/sh Financials 2,045.35 -2.50 -0.12 17.62
Holding Firms 6,436.79 -4.42 -0.07 5.42
Industrial 8,861.91 28.99 0.33 -2.36
Mining & Oil 8,151.38 40.00 0.49 -18.49
OTHER NEWS: Property 2,801.49 -17.96 -0.64 -1.87
Services 1,830.98 22.07 1.22 14.08
• Economy: Inflation rises in March–BSP
Dow Jones 39,142.71 31.95 0.08 3.86
• Economy: Fed holds rates steady and maintains three cuts coming
S&P 500 5,178.02 -0.49 -0.01 8.56
sometime this year Nasdaq 16,166.62 -0.17 0.00 7.70

Index Gainers
MARKET SUMMARY: Ticker Company Price %
MONDE Monde Nissin Corp 10.30 4.46
The PSEi inched up as investors awaited the results of the US Fed’s rate BLOOM Bloomberry Resorts Corp 10.88 3.62
ICT 314.80 2.54
decision, where it later maintained the benchmark overnight borrowing rate. Int'l Container Terminal Services

AGI Alliance Global Group Inc 9.78 1.88

CNVRG Converge ICT Solutions Inc 9.31 1.86
The local benchmark index went up by 8.34 points or 0.12% to close at
6,856.77. The top gainers were MONDE (+4.46%), BLOOM (+3.62%), ICT Index Losers
(+2.54%), AGI (+1.88%), and CNVRG (+1.86%). On the other hand, the top Ticker Company Price %
decliners were ALI (-3.64%), JFC (-3.36%), NIKL (-2.48%), JGS (-1.94%), ALI Ayala Land Inc 31.80 -3.64
JFC Jollibee Foods Corp 259.00 -3.36
and TEL (-1.82%). NIKL Nickel Asia Corp 3.93 -2.48
JGS JG Summit Holdings Inc 35.30 -1.94

Value turnover excluding block trades declined to Php4.7Bil compared TEL PLDT Inc 1345.00 -1.82

to Php5.6Bil on the previous day. Meanwhile, net foreign buying rose to

Php391.4Mil from Php244.8Mil on Tuesday. Top 5 Most Active Stocks
Ticker Company Turnover
BDO BDO Unibank Inc 574,148,300
BPI Bank of the Philippine Islands 427,785,100
ICT Int'l Container Terminal Services 360,833,700
SMPH SM Prime Holdings Inc 278,612,300
ALI Ayala Land Inc 262,243,200

(as of March 20, 2024)

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed
outside of the COL Financial website as these may be subject to tampering or unauthorized alterations.
Daily Notes I Philippine Equity Research Thursday, 21 March 2024

TOP STORIES:

FGEN: FY23 recurring earnings in line with forecast George Ching

Senior Research Manager

FY23 recurring earnings in line with forecasts. FGEN disclosed that First Gen Corporation
excluding one-offs items, 4Q23 recurring net income declined 64% to Ticker: FGEN
US$28Mil. This brought FY23 recurring net income to US$277Mil, up 4% Rating: BUY
FV: Php31.85
y/y, in line with COL forecast (103%) but below consensus forecast (92%).
EDC’s earnings exceeded forecast, offset by the gas plants’ earnings and
FG Hydro’s weaker than expected results. We will release a more detailed
analysis of the FY23 once the F/S is released.

Maintaining BUY rating. We have a BUY rating on FGEN with a FV estimate

of Php31.85/sh. We continue like FGEN given its relatively stable cash flow
since bulk of its capacity is contracted. Furthermore, with the Department
of Energy’s moratorium on new coal power plants, this could potentially
push forward the projected power shortage beginning in 2024, increase
in the competitiveness of FGEN’s gas and renewables plants, and improve
the feasibility of FGEN’s LNG regasification project which will enable its gas
plants to remain viable after the depletion of the Malampaya gas field. At
FGEN’s market price of Php19.78/sh., upside to our FV estimate is at 59%.

ACEN: ACEN enters into property-for-share swap with AREIT George Ching
Senior Research Manager

ACEN enters into property-for-share swap with AREIT. ACEN disclosed

ACEN Corporation
that it has entered into a property-for-share swap agreement with AREIT Ticker: ACEN
whereby AREIT will issue 199.1Mil primary common shares to ACEN in Rating: BUY
FV: Php6.64
exchange for land with an aggregate size of 2,759,135 sqm located in
the Province of Zambales valued at Php6.8Bil. The AREIT shares will be
priced at Php34/sh, set at a 3.75% premium over AREIT’s 30-day VWAP of
PhP32.77. After the transaction, ACEN will lease the land from AREIT for 25
years at a guaranteed fixed rent with annual escalation and with the option
to renew for another 25 years.

The valuation of the transaction at Php6.8Bil represents 2.4% of ACEN’s

total assets and 4.5% of ACEN’s market capitalization.

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Daily Notes I Philippine Equity Research Thursday, 21 March 2024

Reiterate BUY rating. We have a BUY rating on ACEN with a FV estimate of

Php6.64/sh. We continue to like ACEN given the rapid growth of its power
generation portfolio and its focus on renewable energy. From ~4,852MW
currently, a total of 1,900MW of projects are expected to be completed by
2025. At Php3.82/sh, ACEN is trading at 9.3X FY24E P/E. Upside to our FV
estimate of Php6.64/sh is significant at Php72%.

Charmaine Co
BEL, PLC: BEL sets PLC tender offer price at Php0.85/sh
Research Analyst

In a PSE disclosure, BEL provided details of its proposed tender offer Belle Corporation
to acquire PLC’s public float and eventually delist the stock. The tender Ticker: BEL
Rating: N/A
offer price has been set at Php0.85/sh, based on the fairness valuation
FV: N/A
report prepared and submitted by First Metro Investment Corporation. The
tender offer will be conducted from March 22 to April 24, with payment Premium Leisure Corp.
and settlement to take place from April 25 to May 9. According to BEL, the Ticker: PLC
Rating: N/A
tender offer price was set in line with PSE rules on delisting which require
FV: N/A
the price to be the higher of the highest valuation based on the fairness
valuation report or the volume-weighted average price of PLC over the
past year. The First Metro valuation report considered that PLC is fairly
valued at between Php0.60sh to Php0.85/sh, while the stock’s 1-yr VWAP
stands at Php0.60/sh.

Given PSE’s rules that require a listed company to acquire at least 95% of
the outstanding capital stock to push through with delisting, BEL has noted
that should the required acquisition of 95% of PLC’s outstanding stock not
be secured, then the tender offer will be deemed withdrawn.

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Daily Notes I Philippine Equity Research Thursday, 21 March 2024

OTHER NEWS:

Economy: Inflation rises in March–BSP Denise Joaquin

Research Analyst

According to the Bangko Sentral ng Pilipinas (BSP), inflation may have Charmaine Co
quickened to 3.9% in March amid positive base effects. If realized, inflation Research Analyst
in March would be faster than the 3.4% growth last month but slower than
the 7.6% in the same period last year. Moreover, this would be the fourth Paolo Miguel Manansala
Research Analyst
straight month that inflation would fall between the 2%-4% BSP range.
Additionally, when the BSP was asked about changes in policy rates, BSP
Governor Remolona stated that they would look at the data. They are
closely monitoring the trend of inflation as well as the US Federal Reserve’s
decision. However, the central bank will act independently regardless of
the FED’s policy changes. (Source: BusinessWorld)

Economy: Fed holds rates steady and maintains three cuts coming
sometime this year

The US Federal Reserve during its two-day policy meeting maintained

the benchmark overnight borrowing rate at 5.25-5.5%, as expected.
Meanwhile, projections from Fed officials showed three quarter point cuts
are being penciled in by the end of the year. Fed Chair Jerome Powell did
not elaborate on the timing of the cuts but expressed that he expects rate
cuts to come if economic data supports it. Fed officials raised their GDP
growth projections for this year to 2.1% (from 1.4%) and increased their core
inflation forecast based on PCE to 2.6% (from 2.4%). In contrast, the Fed’s
unemployment forecast moved slightly lower to 4% (from 4.1%). (Source: CNBC)

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Daily Notes I Philippine Equity Research Thursday, 21 March 2024

March 2024
Monday Tuesday Wednesday Thursday Friday Saturday Sunday

26 27 28 29 1 2 3
ABD - BDO US - GDP (Nov) PH - BoP (Jan) PH - PMI (Feb)
ABD - MBT ABD - SM PH - Budget Balance ABD - ICT
ABD - MER (Dec) CD - AREIT
PH - Bank Lending
(Jan)
ABD - DNL

4 5 6 7 8 9 10
ABD - SECB PH - CPI (Feb) ABD - MREIT PH - Foreign Reserves (Feb) PH - Unemployment
US - Trade Balanc e (Jan)
ABD - CHIB ABD - TEL
Rate (Jan)
ABD- MEG ABD - DMC US - Unemployment
ABD - RCB Rate (Feb)
CD - MBT
CD - LTG

11 12 13 14 15 16 17
ABD - RLC PH - Trade Balance (Jan) ABD - AC US - PPI (Feb) PH - Budget Balance (Jan)
CD - BDO US - CPI (Feb) ABD - AEV
ABD - ACEN ABD - UBP
CD - PCOR (PRF4A) ABD - AP
CD - PCOR (PRF4B) ABD - JFC
CD - PCOR (PRF4C)

18 19 20 21 22 23 24
PH - BoP (Feb) CD - CNPF US - FOMC Rate
Decision

25 26 27 28 29 30 31
CD - MER PH - Bank Lending US - GDP (Dec)
(Feb)

1 2 3 4 5 6 7

Legend February '24 April '24

CD - Cash Ex-Date LD - Listing Date EOS - ETF Offer Start PH - Philippines M T W T F S S M T W T F S S
STD - Stock Ex-Date SRD - SRO Ex-Date EOE - ETF Offer End US - United States of America 1 2 3 4 1 2 3 4 5 6 7
PD - Property Ex-Date SRS - SRO Start WED - Warrant Exp Date 5 6 7 8 9 10 11 8 9 10 11 12 13 14
ABD - Analysts' Briefing SRE - SRO End 12 13 14 15 16 17 18 15 16 17 18 19 20 21
SMD - Stockholders' Meeting SRL - SRO Listing 19 20 21 22 23 24 25 22 23 24 25 26 27 28

OFS - Offer Start EDD - ETF Dividend 26 27 28 29 29 30

OFE - Offer End Ex-Date

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Daily Notes I Philippine Equity Research Thursday, 21 March 2024

Important Rating Definitions COL Research Team

BUY April Lynn Tan, CFA

Stocks that have a BUY rating have attractive fundamentals and valuations based on our First Vice President & Chief Equity Strategist
analysis. We expect the share price to outperform the market in the next six to 12 months. april.tan@colfinancial.com

HOLD Charles William Ang, CFA

Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive AVP & Head of Research
charles.ang@colfinancial.com
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
George Ching
line or underperform in the market in the next six to twelve months.
Senior Research Manager
george.ching@colfinancial.com
SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the Richard Laneda, CFA
share price to underperform in the next six to12 months. Senior Research Manager
richard.laneda@colfinancial.com

Important Disclaimer Denise Joaquin

Research Analyst
Securities recommended, offered or sold by COL Financial Group, Inc. are subject to investment denise.joaquin@colfinancial.com
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 Charmaine Co
its accuracy and said information may be incomplete or condensed. All opinions and estimates Research Analyst
charmaine.co@colfinancial.com
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
Paolo Miguel Manansala
is not intended as an offer or solicitation for the purchase or sale of a security. COL Financial
Research Analyst
and/or its employees not involved in the preparation of this report may have investments in
paolo.manansala@colfinancial.com
securities of derivatives of the companies mentioned in this report and may trade them in
ways different from those discussed in this report.

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