Capstone Final

REPUBLIC OF THE PHILIPPINES
CAGAYAN STATE UNIVERSITY Tel. No.: (078) 825-1340

ANDREWS CAMPUS Email Address: cbea-andrews@csu.edu.ph
Caritan Sur, Tuguegarao City, Cagayan website: www.csu.edu.ph
COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY
COMPREHENSIVE EVALUATION OF THREE PROMINENT

ENTITIES WITHIN THE PHILIPPINE MARKET:
EMPERADOR DISTILLERS, INC. (EDI), SEMIRARA MINING
AND POWER CORPORATION (SMPC), AND METROPOLITAN
BANK AND TRUST COMPANY (METROBANK)
A Capstone Project
Presented to
The Faculty College of Business and Entrepreneurship and Accountancy
Cagayan State University
Andrews Campus, Tuguegarao City, Cagayan
In Partial Fulfillment
of the Requirements for the Course
Capital Market
By:
Kaddesh Joy Ancheta
Levy-Lyne Baccay
Mary Ann Baloran
Cheennee Cayetano
Roxette Mabborang
Shane Naceno
Elysha Soriano
Chehth Marie Viernes
June 2024
CHAPTER I
INTRODUCTION
The Philippine market, characterized by its dynamic and diverse economic landscape,
hosts numerous prominent entities that play pivotal roles in the nation's economic growth and
development. This comprehensive evaluation focuses on three such leading entities: Emperador
Distillers Inc., Semirara Mining and Power Corporation, and Metropolitan Bank and Trust
Company. Each of these companies operates in distinct sectors, contributing significantly to the
Philippine economy in their own unique ways.
Emperador Distillers Inc., a subsidiary of Alliance Global Group Inc., is a major player in
the beverage industry, known primarily for its production and distribution of alcoholic
beverages. Emperador is the world's largest brandy company, with a strong presence both
domestically and internationally. Its portfolio includes renowned brands like Emperador Brandy
and Fundador. Meanwhile, Semirara Mining and Power Corporation (SMPC) is the Philippines'
largest coal producer and a key player in the country's energy sector. As an integrated mining
and energy company, SMPC is involved in coal mining, power generation, and energy sales. The
company's operations on Semirara Island in Antique Province contribute significantly to the
national energy supply, supporting both industrial and residential power needs. Thus, SMPC’s
role in providing a stable energy supply is crucial for the country’s economic stability and
growth. Metropolitan Bank and Trust Company (Metrobank), on the other hand, is one of the
largest and most established financial institutions in the Philippines. Founded in 1962,
Metrobank offers a comprehensive range of banking and financial services, including retail
banking, corporate banking, investment banking, and wealth management. With a vast network
of branches and ATMs nationwide, Metrobank serves millions of customers, playing a critical
role in the financial sector and contributing to the economic development of the Philippines.
Through this comprehensive evaluation, it'll unveil the financial performance, market
positioning, and strategic initiatives of these key players, shedding light on their impact on the
overall economic landscape of the Philippines. This analysis aims to provide valuable insights
for investors, stakeholders, and policymakers seeking to understand the dynamics of the
Philippine market and make informed decisions. Moreover, it will also highlight potential areas
for growth and collaboration between these companies, ultimately fostering a more robust and
sustainable financial ecosystem in the country. By examining the strengths and weaknesses of
each company, this analysis can help identify opportunities for synergy and innovation that can
drive further economic development in the Philippines.

CHAPTER II
RESEARCH AND DATA COLLECTION
Statement of Financial Position

Emperador Distillers, Inc.
December 2023, 2022, and 2021
Income Statement
December 2023, 2022, and 2021
Cash Flow Statement

December 2023, 2022, and 2021
Key Market Data

P/E Ratio (TTM) 32.38 (06/18/2024)

EPS (TTM) ₱0.52
Market Cap ₱295,085,000,000
Shares Outstanding ₱15,074,000,000
Public Float ₱3,016,000,000
Yield 1.28% (06/18/2024)
Latest Dividend ₱.148834005 (05/22/2018)
Ex-Dividend Date 04/26/2018
Industry Reports
Emperador Inc. – a leading global brandy and whisky conglomerate – has been achieving
yearly record revenues. In 2022, revenues increased by 12% year on year to P62.8 billion.
Revenue for the first quarter of 2023 is P15.6 billion, a 26% increase year on year. EMI’s stellar
performances can partly be attributed to the strong growth of its international business. As part of
its internationalization strategy, EMI has been actively entering new territories and growing its
business overseas. Its market presence has grown to over 100 countries around the world, and
many of its products hold market-leading positions in key areas. In 2022, the international
business saw growth in all markets particularly in Asia, North America, Europe, and Mexico. To
keep up with its fast-growing business, the company is investing in capital expenditures to
expand operations, and upgrade machinery and facilities. EMI is allocating P7 billion for capital
expenditures in 2023. P6 billion is allotted for the whisky segment while the remaining P1 billion
is allotted for the brandy business. Bulk of the capex is for the company’s whisky business,
which has been recording high growth with revenues increasing at 18% CAGR from 2020-2022.
In order to meet the growing demand for the company’s whiskies, facilities upgrades are
necessary to scale operations in its five distilleries across Scotland. The company operates four
malt distilleries namely The Dalmore, Fettercairn, Jura, and Tamnavulin, which produce the
company’s single malts of the same names, and one grain distillery. P1 billion of the capex will
be used to improve brandy production facilities across the Philippines, Spain, and Mexico.
Emperador Inc. president Winston Co said, “As we continue our internationalization journey and
expand our market reach, we are investing in more and better capacity to ensure that we can
supply the growing demand for our high-end premium brands.” Emperador Inc. is a global spirits
conglomerate that owns Emperador Brandy, the world’s best-selling brandy, and Whyte and
Mackay, the world’s fifth largest Scotch whisky producer. Emperador’s portfolio of iconic
brands includes Fundador Brandy, The Dalmore, Fettercairn, Jura, and Tamnavulin Single Malt
Scotch whiskies. Emperador Inc. is a publicly-listed company at both the Philippine Stock
Exchange and the Singapore Exchange.

Recent News
Year 2021
• Emperador Inc. reported a net income of 10.8 billion Philippine pesos in 2021, up 12.3%
from the previous year.
• The company's revenue increased by 18% to 55.9 billion Philippine pesos, driven by
strong sales of its brandy and whisky products.
Year 2022
• Emperador Inc. Sees Growth Amid Challenges.
• Despite facing challenges such as high inflation and supply chain disruptions, Emperador
Inc. reported a net income of 10.1 billion Philippine pesos in 2022, up slightly from the
previous year.
• The company's revenue increased by 12.3% to 62.8 billion Philippine pesos, driven by
strong sales of its whisky segment.
Year 2023
• Emperador Inc. Bullish for 2023.
• Emperador Inc. announced that it is bullish for 2023, citing its strong financial
performance in the previous years and its robust international business.
• The company reported a net income of 10.1 billion Philippine pesos in 2022 and a
revenue of 62.8 billion Philippine pesos, driven by strong sales of its whisky segment.

Semirara Mining and Power Corporation
December 2023, 2022, and 2021
Income Statement
December 2023, 2022, and 2021
Cash Flow Statement

December 2023, 2022, and 2021
Key Market Data

P/E Ratio (TTM) 5.35 (06/18/2024)

EPS (TTM) ₱5.99
Market Cap ₱136,023,000,000
Shares Outstanding -
Public Float ₱834,051,000
Yield 10.92% (06/18/2024)
Latest Dividend ₱1.25 (04/23/2021)
Industry Reports
Integrated energy company Semirara Mining and Power Corporation (SMPC) achieved a
record-breaking coal sales volume of 15.8 million metric tons (MT) in 2023, marking a 6-percent
increase from the previous year. The growth was largely fueled by a 13 percent rise in export
sales, which surged from 7.1 million MT to 8.1 million MT. In contrast, domestic sales stayed
flat at 7.7 million MT. “Our sales performance aligns with our 2023 target of 15 to 16 million
metric tons. It also reflects our team's relentless effort and commitment to deliver stable fuel
supply amidst the challenging dynamics of the global market,” said SMPC president and COO
Maria Cristina C. Gotianun. In 2023, majority of Semirara coal exports went to China (65%),
followed by South Korea (27%) and Brunei (4%). Shipments to Japan, India, and Vietnam made
up the remainder. China shipments recovered by 31 percent from 4 million MT to 5.2 million
MT on heavy stockpiling, consumption recovery and lower hydropower generation. Demand
from South Korea was steady year-on-year at 2.2 million MT while Brunei sales nearly tripled
from 102,967 MT to 306,800 MT. Additionally, as of December 27, 2023, SMPC (PSE: SCC)
underwent a reclassification in its market sector. Previously part of the Mining subsector of the
Mining & Oil sector, SCC is now listed under the Electricity, Energy, Power & Water subsector
of the Industrial sector.

Recent News
Year 2021
• SMPC included in 2021 Bloomberg Gender-Equality Index
• SMPC among top companies in 2019 ACGS Awards
• SMPC recognized as among the best in corporate governance
• SMPC's inaugural sustainability report wins 2 excellence awards in the Philippine Quill
• Semirara income surges to P3.98 B in second quarter
• SMPC donates additional 9,000 antigen kits to Antique
Year 2022
• Semirara hailed as top-ranked listed firm
• SMPC remits record P5.9B royalty in first quarter; up 807% YoY
Year 2023
• SMPC recognized for Corporate Governance Excellence
• Integrated recognized as one of the best energy companies in the Philippines, bagging the
silver award in the 2023 Asia’s Best Managed Companies Poll by FinanceAsia.
• Integrated energy company Semirara Mining and Power Corporation (SMPC), in
partnership with the Department of Energy (DOE), provided rainwater collection systems
to 16 schools in Caluya, Antique.
• Semirara remittances grow 151% to P16B
• SMPC partners with stakeholders to clean up Mindoro oil spill debris in Semirara Island
• DMCI Holdings, SMPC among best governed PLCs


Metropolitan Bank and Trust Company
December 2023, 2022, and 2021
Income Statement
December 2023, 2022, and 2021
Cash Flow Statement

December 2023, 2022, and 2021
Key Market Data

P/E Ratio (TTM) 6.94 (06/18/2024)

EPS (TTM) ₱9.73
Market Cap ₱303,049,000,000
Shares Outstanding -
Public Float ₱2,017,000,000
Yield 6.37% (06/18/2024)
Latest Dividend ₱1.40 (03/31/2022)
Industry Reports
Metropolitan Bank & Trust Co.’s (Metrobank) net earnings rose by 31.3% to PHP10.5
billion in the first quarter of 2023 from a year ago. The Bank’s robust growth was propelled by
the combination of the expansion of its lending portfolio, higher margins, and healthy fee income
amid improved asset quality. This translated to a 13.1% return on equity, higher than the 10.3%
recorded in the same period last year. The Bank’s net interest income surged by 28.8% to
PHP24.9 billion, lifted by higher loans and a 54-basis point hike in net interest margin to 3.9%.
Gross loans increased by 12.5% year-on-year, driven by a 12.7% rise in commercial loans and
11.8% expansion in consumer loans. Meanwhile, total deposits grew by 10.8% to PHP2.3 trillion
from a year ago, of which low-cost Current and Savings Accounts (CASA) accounted for 62.1%.
The Bank’s operating expenses jumped by 13.5% to PHP16.9 billion on the back of higher taxes,
technology spending, and transaction-related expenses. The strong revenue growth, nonetheless,
offset the impact of rising expenses, thus improving the cost-to-income ratio to 51.6% from
54.1% from the year before. As a result, pre-provision operating profit increased by 26.4% to
PHP 16.1 billion. Metrobank’s non-performing loans (NPLs) ratio further eased to 1.8% from
2.2% in the same period last year. Moreover, NPL cover further improved to 189.3%, solidifying
the Bank’s buffer against any risks to the portfolio. Meanwhile, Metrobank’s total consolidated
assets stood at PHP2.9 trillion, maintaining its status as the country’s second largest private
universal bank. Total equity stood at PHP320.0 billion. In the first three months of the year,
Metrobank received several recognitions here and abroad. Metrobank was named as the Best
Domestic Private Bank in the Philippines and the Best Bank for Ultra-High-Net-Worth at the
2023 Asiamoney Private Banking Awards. It was also recognized as the Best Service (Asian
Bank) for the Philippines, according to the 2023 Asiamoney Trade Finance Survey. The Bank
also received six awards at the recently held 2023 PDS Awards for its outstanding performance,
leadership, innovation, and overall contribution to the growth and development of the Philippine
financial markets.
Recent News
Year 2021
• The Asian Banker named Metrobank as the Strongest Bank in the Philippines by Balance
Sheet
• Metrobank was recognized as a Top Market Maker among the Government Securities
Eligible Dealers in the country.
Year 2022
• The Banker lauds Metrobank as the Bank of the Year for 2022
• Metrobank first to get three-peat Strongest Bank title from The Asian Banker
Year 2023
• Metropolitan Bank & Trust Co.’s (Metrobank) Private Wealth business bags two
accolades at the 2023 Asiamoney Private Bank Awards
• Metrobank books 29% increase in full-year net income in 2023
• Metrobank gets back-to-back Bank of the Year Award from The Banker
CHAPTER III
FINANCIAL ANALYSIS
This chapter presents the key financial ratios such as profitability ratios (ROE, ROA), liquidity
ratios (current ratio, quick ratio), leverage ratios (debt-to-equity ratio), and efficiency ratios
(inventory turnover, receivables turnover) of Emperador Distillers Inc., Semirara Mining and
Power Corporation, and Metropolitan Bank and Trust Company.
Profitability Ratio
Profitability Ratio 2023 2022 2021

ROE 12.19% 11.53% 12.89%
ROA 7.46% 7.23% 7.9%
Analysis:
ROE decreased from 12.89% in 2021 to 11.53% in 2022, a drop of 1.36 points. However, ROE
then increased to 12.19% in 2023, recovering some of the previous year's decline but still below
the 2021 level. ROA followed a similar trend, decreasing from 7.9% in 2021 to 7.23% in 2022, a
drop of 0.67 points. In 2023, ROA increased to 7.46%, recovering some ground but still below
the 2021 level. To improve profitability, the company may need to optimize its use of equity and
assets, reduce costs, or explore new revenue streams.
Liquidity Ratio
Liquidity Ratio 2023 2022 2021

Current Ratio 2.66% 2.73% 2.76%
Quick Ratio 1.27% 1.28% 1.26%
Analysis:
The current ratio decreased from 2.76% in 2021 to 2.73% in 2022 and further to 2.66% in 2023.
A lower current ratio may suggest the company is using more of its current assets to fund
operations or pay down debt. The quick ratio remained relatively stable, increasing slightly from
1.26% in 2021 to 1.28% in 2022 before dipping to 1.27% in 2023.

The stability of the quick ratio suggests the company is maintaining a consistent level of highly
liquid assets compared to current liabilities. The company's strong liquidity position, as
evidenced by current and quick ratios well above 1.0, suggests it has ample resources to cover
short-term obligations. However, the slight decline in current ratio bears watching to ensure the
company maintains an appropriate balance between liquidity and efficient use of assets.
Leverage Ratio
Leverage Ratio 2023 2022 2021

Debt-to-Equity Ratio 0.28% 0.27% 0.32%
Analysis :
The debt-to-equity ratio decreased from 0.32% in 2021 to 0.27% in 2022, indicating the
company reduced its reliance on debt financing relative to equity. In 2023, the ratio increased
slightly to 0.28%, but remained lower than the 2021 level. The company's debt-to-equity ratios in
the 0.27-0.32 range over the three-year period indicate a conservative capital structure with a
strong equity base. This suggests the company has low financial risk, but may be forgoing some
tax benefits of debt financing.
Efficiency Ratio
Efficiency Ratio 2023 2022 2021

Inventory Turnover 0.90% 0.97% 0.92%
Receivable Turnover 4.00% 3.76% 3.86%
Analysis:
The inventory turnover ratio decreased from 0.92% in 2021 to 0.90% in 2023, indicating a slight
decline in inventory management efficiency. The receivable turnover ratio increased from 3.86%
in 2021 to 4% in 2023, indicating an improvement in accounts receivable collection efficiency.
The efficiency ratios of the company indicate a mixed performance. While the receivable
turnover ratio improved, the inventory turnover ratio declined. This suggests that the company
needs to focus on improving its inventory management to maintain efficiency and reduce costs.
Profitability Ratio

ROE 44.78% 62.05% 35.52%
ROA 65.72% 88.80% 22.62%
Analysis:
The company's profitability ratio shows a significant trend concerning with an increase ROE
from 35.52% in 2021 to 62.05% in 2022 and dropping from 44.78% in 2023. Where as there is
an increase in ROA from 22.62% in 2021 to 88.80% in 2022 and dropping from 65.62% in 2023.
This suggest that the company has missed opportunities which could increase profits through
better asset management. However, high profitability ratios are always good,they show a high
level of efficiency.
Liquidity Ratio

Current Ratio 2.38% 0.29% 1.85%
Quick Ratio 1.63% 2.08% 1.12%
Analysis:
The company's liquidity ratios shows a concerning trend with a current ratio decreasing from
1.85% in 2021 to 0.29% in 2022 and an increase ratio of 2.38% in 2023. Where as, the quick
ratio,has increased from 1.12% in 2021 to 2.08% in 2022 and a decreased ratio of 1.63 in 2023.
This means that a high liquidity ratio may be an indication that the company is too focused on
liquidity to the detriment of efficiently utilizing capital to grow and expand its business.
Moreover, a Low liquidity ratio could signal a company is suffering from financial trouble
Leverage Ratio

Analysis :
The company's leverage ratio has remained low over the past three years concerning a little
increase from 0.57% in 2021 to 0.36% in 2023. This indicates that a lower financial leverage
ratio is usually a mark of a financially responsible business with a steady revenue stream.
Efficiency Ratio

Analysis:
The company's efficiency ratios shows a concerning trend with a significant decline in both
inventory turnover from 2.49% in 2021 to 1.42% in 2023 and receivable turnover from 3.78% in
2021 to 1.93% in 2023. This implies that a lower efficiency ratio indicates that the ompany uses
its resources more effectively and generates more profit from its sales.
Profitability Ratio

ROE 12.51% 10.29% 6.89%
ROA 1.42% 1.23% 0.89%
Analysis:
The company's profitability ratio shows a significant trend concerning return on equity (ROE)
and return on assets (ROA) over the past three years. The increasing trend indicates that
Metropolitan Bank and Trust Company has been effectively utilizing its assets to generate profits
for its shareholders.
Liquidity Ratio

Current Ratio 19.32% 21.70% 22.70%
Quick Ratio 12.47% 15.11% 16.08%
Analysis:
The company's liquidity ratios shows a concerning trend with a decreasing current ratio and
quick ratio over the past three years. This may indicate potential challenges in meeting short-
term obligations or converting assets into cash quickly.

Leverage Ratio

Analysis :
The company's leverage ratio has increased significantly from 2021 to 2023, indicating a higher
level of debt relative to equity. This may raise concerns about the company's financial stability
and ability to meet long-term obligations.
Efficiency Ratio

Analysis:
The company's efficiency ratios shows a slight decrease in efficiency from 2021 to 2023, as
indicated by lower inventory turnover and receivable turnover percentages. This may suggest
potential issues with managing inventory and collecting receivables efficiently.

CHAPTER IV
INDUSTRY AND MARKET ANALYSIS
This chapter examines the industry and market analysis, one of the fundamental components of
corporate strategy. This includes the SWOT analysis of each company and the performance with
the industry benchmark and market trends. By conducting this, executives can make informed
decisions about how to position their organization within the competitive landscape.
SWOT Analysis
STRENGTH WEAKNESSES
• Strong Brand Portfolio • Market Dependence
Emperador Inc. owns several well-known A significant portion of the company's
brands, including Emperador Brandy and revenue comes from a few key markets,
Whyte & Mackay, which have strong such as the Philippines and Spain, making
market recognition and loyalty. it vulnerable to economic fluctuations in
these regions.
• Global Market Presence
The company has a significant • Competition to other Brands
international footprint, with operations in The company faces intense competition
over 100 countries, providing it with a from other well-established brands in the
diverse revenue stream. industry, which can impact its market
share and profitability.
• Diverse Product Portfolio
The company offers a wide range of • Regulatory Risks
distilled spirits and other alcoholic The company operates in a highly
beverages, including brandy and scotch regulated industry, and changes in
whisky, through its various subsidiaries alcohol-related laws and taxes in different
and brands. countries can impact operations and
profitability.
OPPORTUNITIES THREATS
• Emerging Markets • Intense Competition
There is significant growth potential in The spirits industry is highly competitive,
emerging markets where disposable with numerous global and regional
incomes are rising and consumer players vying for market share, which can
preferences are shifting towards premium lead to price wars and reduced margins.
spirits.
• Economic Downturns:
• E-commerce Expansion Global economic instability or recessions
Investing in digital sales channels and can reduce consumer spending on
leveraging e-commerce can enhance discretionary items like alcoholic
market reach and cater to changing beverages, impacting sales.
consumer purchasing behaviors.
• Changing Consumer Preferences
• Strategic Partnerships Shifts in consumer preferences, such as
Emperador Inc. can form strategic increasing health consciousness and
partnerships with other companies or declining alcohol consumption in some
organizations to expand its distribution markets, can impact demand for
channels and increase its market reach. traditional spirits.
SWOT Analysis
STRENGTH WEAKNESSES
• Largest Coal Producer in the • Environmental Impact
Philippines Coal mining and power generation have
Semirara Mining and Power Corporation significant environmental impacts,
is the largest coal producer in the country, including greenhouse gas emissions,
giving it significant market dominance habitat destruction, and pollution. This
and influence in the energy sector. can lead to regulatory challenges and
increased operational costs.
• Strategic Location
Located on Semirara Island, the • Dependence on Coal
company's mining operations benefit from Heavy reliance on coal as a primary
abundant coal reserves, ensuring a steady energy source can be a drawback,
supply of raw materials for power especially with global trends moving
generation and other uses. towards renewable energy and stricter
environmental regulations.
• Stable Revenue Streams
The company has a diversified customer • High Operational Costs
base and long-term contracts, which Mining and power generation are capital-
provide stable and predictable revenue intensive industries with high operational
streams. and maintenance costs, which can impact
profitability if not managed efficiently.
• Strong Financial Performance
Consistent profitability and robust • Geographic Concentration
financial health enable SMPC to invest in Operations concentrated on Semirara
new technologies, expand operations, and Island may pose risks related to natural
withstand market fluctuations. disasters, logistical challenges, and local
opposition or regulatory changes.
• Expansion into Renewable Energy • Regulatory Changes
Diversifying into renewable energy Increasingly stringent environmental
sources, such as solar or wind power, can regulations and policies aimed at reducing
reduce environmental impact and align carbon emissions can impact operations
with global energy trends, opening new and financial performance.
revenue streams and improving corporate
sustainability. • Market Competition
Growing competition from alternative
• Technological Advancements energy sources and other coal producers
Investing in advanced mining and power can erode market share and profitability.
generation technologies can enhance
efficiency, reduce environmental • Volatility in Coal Prices
footprint, and lower operational costs. Fluctuations in global coal prices can
affect revenue and profitability,
• Export Market Expansion particularly if production costs are high.
Exploring international markets for coal
and energy exports can diversify revenue • Climate Change
streams and reduce dependence on the The physical impacts of climate change,
domestic market. such as extreme weather events, can
disrupt operations, damage infrastructure,
and increase operational costs.
SWOT Analysis
STRENGTH WEAKNESSES
• Brand Recognition • Operational Risks
High level of trust and loyalty from Complex operations may lead to higher
customers due to its longstanding operational risks, including compliance
presence and reputation. and regulatory risks. It is also vulnerable
to internal fraud and cybersecurity threats.
• Comprehensive Range of Services
Offers a wide array of financial services • *Customer Service Challenges
including commercial banking, Reports of inconsistent customer service
investment banking, insurance, and quality across branches.
wealth management. Some customers experience long wait
times and bureaucratic processes.
• Extensive Branch Network
Large network of branches and ATMs, • Market Concentration
providing easy access for customers. It Heavy reliance on the Philippine market
also have a strong presence in both urban makes it vulnerable to local economic
and rural areas. downturns.
• Technological Advancements
Mobile and internet banking platforms are
well-developed and user-friendly.
• Digital Transformation • Intense Competition
Increasing investment in digital banking Facing strong competition from both
services can attract tech-savvy customers traditional banks and new entrants,
and reduce operational costs. including digital-only banks and fintech
companies. Pressure on margins and
• Economic Growth market share due to competitive pricing
Benefiting from the Philippines’ growing and innovative offerings by competitors.
economy, rising middle class, and
increasing demand for banking services. • Regulatory Change
Changing regulations and compliance
• Product Expansion requirements can increase operational
Expanding insurance and wealth costs and complexity which may cause
management services. risk of fines and penalties for non-
compliance.
• Strategic Alliances and Acquisitions
Opportunities to form strategic alliances • Economic Volatility
or acquire smaller banks to enhance Exposure to economic downturns,
market share and geographic coverage. It inflation, and currency fluctuations.
may have a potential for cross-border Political instability and policy changes
mergers and acquisitions to enter new may also affect business operations and
markets. profitability.
• Technological Disruptions
Rapid technological changes require
continuous investment in IT
infrastructure. Risk of cybersecurity
breaches and data privacy issues that can
damage reputation and lead to financial
losses.
Company Performance with Industry Benchmark and Market Trends

Industry: Alcoholic Beverages
Key Performance Metrics:
1. Revenue Growth
• Emperador has demonstrated consistent revenue growth driven by strong domestic
demand and international expansion.
2. Profit Margins
• The company's profit margins are competitive within the beverage industry, aided by
cost-effective production and premium product lines.
3. Market Share
• Emperador holds a significant market share in the Philippines and has growing
international presence, particularly in Europe and the United States.
Industry Benchmarks and Market Trends:
1. Global Market Trends
• Increasing demand for premium alcoholic beverages and spirits.
2. Industry Growth Rate
• The global alcoholic beverages market is growing at a CAGR of around 3-4%.
3. Comparative Performance
• Emperador’s growth rates and profit margins compare favorably against global giants
like Diageo and Pernod Ricard, especially in premium segments.
Competitive Position: Emperador’s strong brand portfolio and strategic acquisitions have
positioned it well against both local and international competitors. Its competitive edge lies in its
cost structure, premiumization strategy, and expanding global footprint.


Semirara Mining and Power Corporationmperador
Industry: Mining and Energy
1. Revenue and Production
• SMPC is the largest coal producer in the Philippines, with substantial contributions from
its power generation business.
2. Cost Efficiency
• The company maintains a competitive cost structure, with economies of scale in mining
operations.
3. Profit Margins
• Strong profit margins, although subject to volatility due to commodity price fluctuations.
1. Global Coal Market
• The global coal market has faced challenges due to shifting energy policies favoring
renewable energy, but demand remains strong in Asia.
2. Energy Sector Trends
• Increasing demand for reliable power supply in developing economies.
3. Industry Growth Rate
• The mining industry growth rate is relatively flat, but energy demand in Southeast Asia is
growing at 2-3% annually.
Competitive Position: SMPC’s competitive advantage lies in its integrated operations (mining
and power generation), making it less susceptible to market volatility. The company's market
position in the Philippines is strong, with opportunities for further growth in energy demand.

Industry: Banking and Financial Services
1. Asset Growth
• Metrobank has shown steady asset growth, driven by robust lending activities.
2. Net Interest Margin (NIM)
• Metrobank’s NIM is competitive within the Philippine banking industry.
3. Return on Equity (ROE)
• ROE is a critical measure, with Metrobank performing well compared to its peers,
although it faces pressure from economic cycles.
1. Banking Sector Trends
• Digital transformation, increased regulatory scrutiny, and competitive pressures from
fintech.
2. Industry Growth Rate:
• The Philippine banking sector is growing at around 5-6% annually.
3. Comparative Performance:
• Compared to other leading banks in the Philippines (like BDO and BPI), Metrobank is
competitive in terms of asset growth and profitability metrics.
Competitive Position: Metrobank’s extensive branch network, diversified service offerings, and
strong financial performance provide a solid competitive position. However, it must continue to
innovate in digital banking to maintain and grow its market share.

Summary Evaluation
1. Emperador Distillers Inc.
It has a strong competitive position due to premium product offerings and
international expansion. Performs well against global benchmarks.
2. Semirara Mining and Power Corporation
It is leading the market position in the Philippines with a competitive cost
structure, but faces market volatility risks.
3. Metropolitan Bank and Trust Company
It has a solid financial performance and extensive network in the Philippine
banking sector. Competitive but must adapt to digital transformation trends.
Overall, each company demonstrates strong competitive positions within their respective
industries, supported by strategic initiatives and market presence. Emperador's premiumization
strategy, SMPC’s integrated operations, and Metrobank's extensive service offerings and
network are key differentiators in maintaining their market leadership.

CHAPTER V
VALUATION AND INVESTMENT RECOMMENDATION
Discounted Cash Flow

Valuation
Estimated DCF Value of one EMI stock is 7.79
Discounted Cash Flow PHP. Compared to the current market price of
18.76 PHP, the stock is overvalued by 58%.
Price-to-Earnings Ratio
Valuation 2023 2022 2021
Price-to-Earnings 34 32.8 35
Price-to-Book Ratio
Valuation 2023 2022 2021
Price-to-Book 3.6 3.8 4.6
Investment Recommendation
Emperador Inc. has shown stable revenue growth, with a notable 12% increase in 2022
and a 26% increase in the first quarter of the fiscal year 2023. Despite challenges like high
inflation and supply chain disruptions, the company was able to maintain strong net income
figures of 10.1 billion PHP in 2021 and 2022. The company's quick and current ratios are both
substantially over 1.0, indicating that it can meet short-term obligations. Nevertheless, there will
be careful observation needed due to a minor fall in the current ratio from 2021 to 2023.
Efficiency ratios provide inconsistent results, with a minor decrease in inventory turnover and an
increase in accounts receivable turnover. This highlights areas where inventory management has
to be improved. Investors should consider potential risks such as market volatility and
competition, while also looking out for opportunities in emerging markets or new product
developments that could drive growth for the company. Conducting a thorough analysis of EMI's
management team and their strategic initiatives can provide valuable insights into the company's
future prospects. It is important for investors to closely monitor any updates or changes in the
industry landscape that could impact EMI's performance and valuation.

Semirara Mining and Power Corporationmperador

Valuation
The intrinsic value of one SCC stock under the
Discounted Cash Flow base case scenario is 39.62 PHP. Compared to the
current market price of 31.75 PHP, Semirara
Mining and Power Corporation is undervalued by
20%.
Valuation 2023 2022 2021
Price-to-Earnings - 2.28 1.99
Price-to-Book Ratio
Valuation 2023 2022 2021
Price-to-Book 3.6 3.8 4.6
Based on the analysis indicating that Semirara Mining and Power Corporation (SCC) is
undervalued by 20% compared to its intrinsic value of 39.62 PHP, there is a compelling
investment opportunity in SCC stock. The current market price of 31.75 PHP suggests that there
is significant potential for growth once the stock price aligns with its intrinsic value. This
undervaluation makes SCC an attractive option for investors seeking to capitalize on potential
price appreciation. Examining the price-to-earnings (P/E) and price-to-book (P/B) ratios for SCC
further supports the investment case. The P/E ratios for 2021 and 2022 are 1.99 and 2.28,
respectively, indicating a favorable valuation compared to the market price. Additionally, the
P/B ratios for 2021, 2022, and 2023 demonstrate a consistent trend of undervaluation, with
figures of 4.6, 3.8, and 3.6, respectively. These metrics suggest that SCC stock may be
undervalued relative to its financial performance and book value, reinforcing the investment
opportunity.
While considering investing in Semirara Mining and Power Corporation, it is crucial to
be aware of the potential risks involved. Market volatility can impact stock prices, leading to
fluctuations that may affect the investment's value. Moreover, regulatory changes in the mining
and power sectors could present challenges for SCC, influencing its operational and financial
performance. These risks underscore the importance of conducting thorough due diligence and
monitoring market conditions closely. Despite the risks, there are notable opportunities that make
SCC an attractive investment prospect. The company's strong position in both the mining and
power sectors, coupled with its undervaluation and growth potential, positions it well for future
success. With plans for expansion and the potential for increased demand in the energy industry,
Semirara Mining and Power Corporation presents opportunities for long-term growth and
profitability for investors.


Valuation
Estimated DCF Value of one MBT stock is 138.47
Discounted Cash Flow PHP. Compared to the current market price of
67.5 PHP, the stock is undervalued by 51%.
Valuation 2023 2022 2021
Price-to-Earnings - 6.23 11.3
Price-to-Book Ratio
Valuation 2023 2022 2021
Price-to-Book 0.64 0.73 0.76
Metropolitan Bank and Trust Company Based on the discounted cash flow valuation,
MBT stock is significantly undervalued, presenting a good buying opportunity. However,
investors should consider the potential risks associated with the banking industry, such as
economic downturns and regulatory changes. The low price-to-earnings and price-to-book ratios
also suggest that the stock may be a good long-term investment option. Investors should also be
aware of any potential impact of interest rate fluctuations on MBT's performance and should
consider the undervaluation and financial metrics of MBT. Risk management strategies should
be implemented to mitigate potential losses in case of adverse market conditions. Conducting
thorough research on the company's financial health and industry trends is crucial before making
any investment decisions. Opportunities may also arise from MBT's expansion into new markets
or product lines, so staying informed about any developments in these areas is important for
investors. Monitoring competitors and staying updated on any technological advancements that
could affect MBT's business model can also help investors make more informed decisions.
Conclusion
Emperador Distillers Inc., Semirara Mining and Power Corporation, and Metropolitan
Bank & Trust Company each hold strong competitive positions within their respective industries,
supported by strategic initiatives and solid financial performance.
Emperador has demonstrated robust growth through its premiumization strategy and
international expansion. Its competitive advantages include a strong brand portfolio, cost-
effective production, and strategic acquisitions that enhance its global presence. Emperador’s
performance metrics, such as revenue growth and profit margins, compare favorably with global
industry leaders, positioning it well against both local and international competitors.
Semirara Mining and Power Corporation maintains a dominant position in the Philippines
as the largest coal producer and a significant power generator. Its competitive edge lies in its
integrated operations, which provide resilience against market volatility and cost efficiency.
Despite facing challenges from global shifts towards renewable energy, SMPC benefits from the
growing energy demand in Southeast Asia. Its robust revenue and strong profit margins
underscore its solid market position and potential for continued growth in the energy sector.
Metropolitan Bank & Trust Company is one of the leading financial institutions in the
Philippines, characterized by steady asset growth, competitive net interest margins, and strong
return on equity. However, its seems like it is currently facing challenges from digital
transformation and increased competition from fintech companies. Despite that, Metrobank’s
strategic investments in technology and customer service improvements still ensures its sustained
competitiveness in the banking sector.
Collectively, their strategic initiatives, financial health, and market adaptability position
them well for sustained growth and competitive performance in their respective markets.
References
Emperador Inc. | The Alliance Global Group, Inc. (2024). Allianceglobalinc.com.

https://www.allianceglobalinc.com/subsidiaries/emperador-inc
Emperador Inc (EMI) Cash Flow - Investing.com PH. (2022). Investing.com Philippines.
https://ph.investing.com/equities/emperador-inc-cash-flow
Emperador Inc (EMI) Balance Sheet - Investing.com PH. (2022). Investing.com Philippines.
https://ph.investing.com/equities/emperador-inc-balance-sheet
Emperador Inc (EMI) Income Statement - Investing.com PH. (2022). Investing.com Philippines.
https://ph.investing.com/equities/emperador-inc-income-statement
Annual Report. (2023). Pse.com.ph.
https://edge.pse.com.ph/openDiscViewer.do?edge_no=8665924ecf1bcef89e4dc6f6c9b65995
Annual Report. (2023). Pse.com.ph.
https://edge.pse.com.ph/openDiscViewer.do?edge_no=8665924ecf1bcef89e4dc6f6c9b65995
Simply Wall St. Filipino (PSEi) Market Analysis & Valuation - Updated Today. Simply Wall St.
https://simplywall.st/markets/p
Company List. (2024). Pse.com.ph.
https://edge.pse.com.ph/companyDirectory/form.do
Investor Relations. (2023). Semiraramining.com
https://semiraramining.com/investor-relations#company-disclosures
Metropolitan Bank (Metrobank) (MTPOY) - P/E ratio. (2024). Companiesmarketcap.com.
https://companiesmarketcap.com/metropolitan-bank-metrobank/pe-ratio/
Metrobank Financial Statements
https://web-assets.metrobank.com.ph/1708676403
mbtc_sec17c_mda_afs123123_21february2024.pdf
Who We Are | Metrobank. (2022, December 2).
Https://Metrobank.com.ph.
https://www.metrobank.com.ph/about-us/company-disclosures

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REPUBLIC OF THE PHILIPPINES

CAGAYAN STATE UNIVERSITY Tel. No.: (078) 825-1340

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

COMPREHENSIVE EVALUATION OF THREE PROMINENT

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Philippine economy in their own unique ways.

company's operations on Semirara Island in Antique Province contribute significantly to the

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

drive further economic development in the Philippines.

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

RESEARCH AND DATA COLLECTION

Statement of Financial Position

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Cash Flow Statement

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Key Market Data

P/E Ratio (TTM) 32.38 (06/18/2024)

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Exchange and the Singapore Exchange.

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

from the previous year.

strong sales of its brandy and whisky products.

• Emperador Inc. Sees Growth Amid Challenges.

strong sales of its whisky segment.

• Emperador Inc. Bullish for 2023.

performance in the previous years and its robust international business.

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Statement of Financial Position

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Cash Flow Statement

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Key Market Data

P/E Ratio (TTM) 5.35 (06/18/2024)

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

MT on heavy stockpiling, consumption recovery and lower hydropower generation. Demand

of the Industrial sector.

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

• SMPC included in 2021 Bloomberg Gender-Equality Index

• SMPC among top companies in 2019 ACGS Awards

• SMPC recognized as among the best in corporate governance

• Semirara income surges to P3.98 B in second quarter

• SMPC donates additional 9,000 antigen kits to Antique

• Semirara hailed as top-ranked listed firm

• SMPC remits record P5.9B royalty in first quarter; up 807% YoY

• SMPC recognized for Corporate Governance Excellence

• Integrated energy company Semirara Mining and Power Corporation (SMPC), in

to 16 schools in Caluya, Antique.

• Semirara remittances grow 151% to P16B

• DMCI Holdings, SMPC among best governed PLCs

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Statement of Financial Position

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Cash Flow Statement

COLLEGE OF BUSINESS, ENTREPRENEURSHIP AND ACCOUNTANCY

Key Market Data