Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

Philippine Stock Exchange / Equity Bottom-Up

<ul>
<li>We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.</li>
<li>We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.</li>
<li>Figaro Coffee (FCG PM) has been added due to its &gt;20% ROCE, 7x PE, and strong growth potential. We will initiate coverage on it shortly with an insight.</li>
</ul>


We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
Figaro Coffee (FCG PM) has been added due to its &gt;20% ROCE, 7x PE, and strong growth potential. We will initiate coverage on it shortly with an insight.


Shortlist of High Conviction Philippines Equity Ideas - February 2025

<ul>
<li>
<a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" data-smartkarma-citation="entities:23182:1" rel="noopener">Philippine Stock Exchange (PSE PM)</a> reported a slow Q1 2024, with revenue growth of -8% YoY but profit growth of 20% YoY, led by gains on investment income</li>
<li>Cash and Investments at 4 bn pesos account for 24% of mkt cap. It is cheap on EV-EBITDA at 15.7x FY24e. The dividend yield at the current price is 5%. </li>
<li>Multiple catalysts, such as the acquisition of PDS and the implementation of lower clearing fees, the addition of depositary receipts, and derivatives, will also be implemented over time. </li>
</ul>



Philippine Stock Exchange (PSE PM) reported a slow Q1 2024, with revenue growth of -8% YoY but profit growth of 20% YoY, led by gains on investment income
Cash and Investments at 4 bn pesos account for 24% of mkt cap. It is cheap on EV-EBITDA at 15.7x FY24e. The dividend yield at the current price is 5%. 
Multiple catalysts, such as the acquisition of PDS and the implementation of lower clearing fees, the addition of depositary receipts, and derivatives, will also be implemented over time. 


Philippines Exchange (PSE PM): Q1 2024, Slow Quarter, Some Positives Emerging

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

<ul>
<li>* BDO Unibank (BDO.PM) [BDO] reported 4Q21net income of PHP 11.0 bn, a PHP 1.0 bn (10.0%) linked quarter increase, driven by surprisingly positive operating jaws; </li>
<li>The level of net new NPLs declined PHP 319 mn or 1.7% on an annualized basis which is a wonderful turn of events for BDO; and</li>
<li>By our calculation, BDO’s reserves appear fine where they are provided credit quality doesn’t reverse course -suggesting earnings strength on the horizon.</li>
</ul>


* BDO Unibank (BDO.PM) [BDO] reported 4Q21net income of PHP 11.0 bn, a PHP 1.0 bn (10.0%) linked quarter increase, driven by surprisingly positive operating jaws; 
The level of net new NPLs declined PHP 319 mn or 1.7% on an annualized basis which is a wonderful turn of events for BDO; and
By our calculation, BDO’s reserves appear fine where they are provided credit quality doesn’t reverse course -suggesting earnings strength on the horizon.


<ul>
<li>SGX FY 1H22 core results were not robust, coming in at SGD 216 mn, improving just SGD 1.0 mn (0.5%) HOH and reflected weakened revenues; </li>
<li>Derivatives revenue improved 3.4% HOH, resultant of slightly higher contract volumes, and higher rates and lower discounts. HKEX's foray into the A50 will ultimately eat away at SGX’s business; and </li>
<li>Significant strategic alternatives are needed at SGX, if it is to avoid being hollowed out by the HKEX. </li>
</ul>


SGX FY 1H22 core results were not robust, coming in at SGD 216 mn, improving just SGD 1.0 mn (0.5%) HOH and reflected weakened revenues; 
Derivatives revenue improved 3.4% HOH, resultant of slightly higher contract volumes, and higher rates and lower discounts. HKEX's foray into the A50 will ultimately eat away at SGX’s business; and 
Significant strategic alternatives are needed at SGX, if it is to avoid being hollowed out by the HKEX. 


<ul>
<li>
SGX and SPACs: Singapore Exchange (SGX.SP) [SGX] Consultation Paper on the Proposed Listing Framework for Special Purpose Acquisition Companies (SPACs);</li>
<li>
SEC Clamping Down: Creating a SPAC just became more difficult in the US, given the  level of disclosure, marketing practices, and liability issues surrounding SPACs;</li>
<li>
Not A Good Strategy: This is in addition to the SEC issuing accounting guidance for SPACs, and certainly throw a wrench into SGX’s SPAC plans.</li>
</ul>



SGX and SPACs: Singapore Exchange (SGX.SP) [SGX] Consultation Paper on the Proposed Listing Framework for Special Purpose Acquisition Companies (SPACs);

SEC Clamping Down: Creating a SPAC just became more difficult in the US, given the  level of disclosure, marketing practices, and liability issues surrounding SPACs;

Not A Good Strategy: This is in addition to the SEC issuing accounting guidance for SPACs, and certainly throw a wrench into SGX’s SPAC plans.


Singapore Exchange – Another SPAC Wrench

Philippines

The Philippine Stock Exchange, Inc. (PSE) operates as the national stock exchange of the Philippines, providing listing, trading, market data, clearing, and settlement services. It facilitates the trading of various securities, including shares of stock, Exchange Traded Funds (ETFs), and Real Estate Investment Trusts (REITs). The company is headquartered in Taguig City, Philippines, and has been in operation since 1927, including its previous forms.

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Philippine Stock Exchange (PSE PM)

Shortlist of High Conviction Philippines Equity Ideas - February 2025

We compile our selection of small and mid-cap names for the Philippines with our desired characteristics of high dividend yields, value, and margin...

Sameer Taneja

Philippines Exchange (PSE PM): Q1 2024, Slow Quarter, Some Positives Emerging

We summarize the Q1 2024 Philippines Exchange (PSE PM) results. The stock trades at 15.7x EV-EBITDA and a 5% dividend yield with multiple catalysts.

Sameer Taneja

BDO Unibank – Ready to Run

BDO: BDO reported a QOQ 4Q21net income increase of 10.0%, driven by surprisingly positive operating jaws. Net new NPLs were negative, and reserves...

Thomas J. Monaco

Singapore Exchange – No Real Progress

SGX: SGX reported FY 1H22 core results were not robust. The top-line hiccup was nearly offset by better-than-expected cost control.

Thomas J. Monaco

Singapore Exchange – Another SPAC Wrench

SGX: SGX wants to do SPACs, which just became more difficult in the US given likley increased requirements. This should throw certainly throw a...

Thomas J. Monaco

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