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>
<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 an encouraging Q1 2025 with revenue/operating income up 82%/72% YoY, buoyed by the acquisition of PDS. </li>
<li>Despite acquiring 91.6% of PDS (as of 15 May 2025), the company has net cash and investments of 4.8 bn pesos, representing more than 30% of its current market capitalization. </li>
<li>Trading at 13x PE, with a &gt;6% forward dividend yield, and ex-cash ROCE&gt;20%, the stock is cheap. We believe there is a long runway for growth with multiple catalysts.</li>
</ul>



Philippine Stock Exchange (PSE PM) reported an encouraging Q1 2025 with revenue/operating income up 82%/72% YoY, buoyed by the acquisition of PDS. 
Despite acquiring 91.6% of PDS (as of 15 May 2025), the company has net cash and investments of 4.8 bn pesos, representing more than 30% of its current market capitalization. 
Trading at 13x PE, with a &gt;6% forward dividend yield, and ex-cash ROCE&gt;20%, the stock is cheap. We believe there is a long runway for growth with multiple catalysts.


Philippine Stock Exchange (PSE PM): Inflection In Q1 2025, More Catalysts To Come

<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>We preview earnings for our top picks: <a href="https://www.smartkarma.com/entities/digiplus-interactive-corp" target="_blank" data-smartkarma-citation="entities:23060:1" rel="noopener">DigiPlus Interactive (PLUS PM)</a>, <a href="https://www.smartkarma.com/entities/ginebra-san-miguel-inc" target="_blank" data-smartkarma-citation="entities:23029:1" rel="noopener">Ginebra San Miguel (GSMI PM)</a>, <a href="https://www.smartkarma.com/entities/the-keepers-holdings-inc" target="_blank" data-smartkarma-citation="entities:23003:1" rel="noopener">The Keepers Holdings (KEEPR PM), </a>and the <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> </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.
We preview earnings for our top picks: DigiPlus Interactive (PLUS PM), Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM), and the Philippine Stock Exchange (PSE PM) 


Shortlist of High Conviction Philippines Equity Ideas - January 2025

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<li><span>In its press release on December 26th, the <a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" rel="noopener">Philippine Stock Exchange (PSE PM)</a> detailed two catalysts: acquiring 61.92% of PDS and increasing the listing maintenance fee. </span></li>
<li>The PDS (Philippine Dealing System) pricing of 2.32 billion pesos for 61.92% implies a 10.5x PE (7.5x PE ex-cash), which will be accretive to earnings despite the cash coming down. </li>
<li>With the 75% increase in the upper limit of listing and maintenance fees and the acquisition, the stock trades at 12-13x PE/7.6% dividend yield and three billion net cash.</li>
</ul>


In its press release on December 26th, the Philippine Stock Exchange (PSE PM) detailed two catalysts: acquiring 61.92% of PDS and increasing the listing maintenance fee. 
The PDS (Philippine Dealing System) pricing of 2.32 billion pesos for 61.92% implies a 10.5x PE (7.5x PE ex-cash), which will be accretive to earnings despite the cash coming down. 
With the 75% increase in the upper limit of listing and maintenance fees and the acquisition, the stock trades at 12-13x PE/7.6% dividend yield and three billion net cash.


Philippine Stock Exchange (PSE PM): A Detailed Analysis Of Two Value Doubling Catalysts

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Thematic (Sector/Industry)

<ul>
<li>We stick with Brazilian exchange B3 as our core value pick; it has a growing share of data revenues, its post-trade revenues are understated and equity fee pressure is easing</li>
<li>We keep Hong Kong Exchange as a buy, with its high share of post-trade revenues; HKEx shares have been highly volatile, but they represent relative value combined with growth potential</li>
<li>Philippines Stock Exchange (PSE) and BSE are new additions to our coverage of EM exchanges with PSE being one to watch; MexBolsa is deep value, but lacking a re-rating catalyst</li>
</ul>


We stick with Brazilian exchange B3 as our core value pick; it has a growing share of data revenues, its post-trade revenues are understated and equity fee pressure is easing
We keep Hong Kong Exchange as a buy, with its high share of post-trade revenues; HKEx shares have been highly volatile, but they represent relative value combined with growth potential
Philippines Stock Exchange (PSE) and BSE are new additions to our coverage of EM exchanges with PSE being one to watch; MexBolsa is deep value, but lacking a re-rating catalyst


Emerging Market Exchanges – Brazilian Exchange B3 (B3SA3 BZ) Stands Out

<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 Q4 2023/FY23, with revenue down 9.5%/8% YoY and profits down 30% YoY for Q4 FY23 but up 4% YoY for FY23. </li>
<li>We are excited by the recent passing of a bill to reduce the tax on stock transactions and a proposed law for lowering the tax on dividends for non-residents.</li>
<li>Trading at 19x FY24e with a 5% dividend yield, EBITDA/PAT margins &gt;55%/40%, and 25% of the market cap in cash with an acquisition angle, this stock is a must-watch</li>
</ul>



Philippine Stock Exchange (PSE PM) reported a slow Q4 2023/FY23, with revenue down 9.5%/8% YoY and profits down 30% YoY for Q4 FY23 but up 4% YoY for FY23. 
We are excited by the recent passing of a bill to reduce the tax on stock transactions and a proposed law for lowering the tax on dividends for non-residents.
Trading at 19x FY24e with a 5% dividend yield, EBITDA/PAT margins &gt;55%/40%, and 25% of the market cap in cash with an acquisition angle, this stock is a must-watch


Philippines Exchange (PSE PM): Slow Q4 2023, FY24 Catalysts in the Pipeline

Philippines

Philippine Stock Exchange Inc. is a self-regulatory organization that provides a fair, efficient, transparent and orderly market for the buying and selling of securities.

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Philippine Stock Exchange (PSE PM)