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><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

<ul>
<li>We are gradually building a high-conviction coverage of ideas for mid and small-cap companies in the Philippines.</li>
<li>We established metrics focusing on high ROCE, sustainable growth of 10-15% year-over-year, robust balance sheets, and prudent capital allocation, essential elements for identifying potential multi-bagger opportunities.</li>
<li>We add <a href="https://www.smartkarma.com/entities/intl-container-term-svcs-inc" target="_blank" data-smartkarma-citation="entities:20001:1" rel="noopener">ICTSI (ICT PM)</a>  and <a href="https://www.smartkarma.com/entities/asian-terminals-inc" target="_blank" data-smartkarma-citation="entities:22959:1" rel="noopener">Asian Terminals (ATI PM)</a> to our Philippines high-conviction list, which we will be initiating coverage on shortly. </li>
</ul>


We are gradually building a high-conviction coverage of ideas for mid and small-cap companies in the Philippines.
We established metrics focusing on high ROCE, sustainable growth of 10-15% year-over-year, robust balance sheets, and prudent capital allocation, essential elements for identifying potential multi-bagger opportunities.
We add ICTSI (ICT PM)  and Asian Terminals (ATI PM) to our Philippines high-conviction list, which we will be initiating coverage on shortly. 


Shortlist of High Conviction Philippines Equity Ideas - April 2025

<ul>
<li>We summarize the <a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" rel="noopener">Philippine Stock Exchange (PSE PM)</a> earnings for FY24. Revenues/core earnings declined 1.2%/2.9% YoY. Inclusive of the gain in the stake of PDS, profits were up 56% YoY.</li>
<li>The outlook for 2025 is strong, bolstered by the completed acquisition of a 78.3% stake in PDS and a 75% increase in listing maintenance fees, which contribute 18% of revenues.</li>
<li>With a FY25 PE of 13.6x, over 10% cash in the market, more than 50% EBITDA, and a 7.4% dividend yield, the stock presents an attractive investment opportunity.</li>
</ul>


We summarize the Philippine Stock Exchange (PSE PM) earnings for FY24. Revenues/core earnings declined 1.2%/2.9% YoY. Inclusive of the gain in the stake of PDS, profits were up 56% YoY.
The outlook for 2025 is strong, bolstered by the completed acquisition of a 78.3% stake in PDS and a 75% increase in listing maintenance fees, which contribute 18% of revenues.
With a FY25 PE of 13.6x, over 10% cash in the market, more than 50% EBITDA, and a 7.4% dividend yield, the stock presents an attractive investment opportunity.


Philippines Exchange (PSE PM): Steady FY24 Sets The Stage For Catalyst-Filled FY25

<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 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

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Philippine Stock Exchange (PSE PM)