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

<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>
<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

<ul>
<li>Q3 2023 results for 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> were uneventful. EBITDA margins were rock solid at&gt;60%, and net margins were&gt;40%. Revenues and profits were up 1.3%/51% YoY.</li>
<li>Cash and Investments at 4.8 bn pesos account for 32% of the market capitalization. The cash will aid in acquiring the remaining 79% stake in PDS.</li>
<li>Trading at 19x/17x FY23e/24e and a dividend yield of 5.3%/5.9%, there are several catalysts to drive earnings over the next few years (and investors are paid to wait). </li>
</ul>


Q3 2023 results for the Philippine Stock Exchange / (PSE PM) were uneventful. EBITDA margins were rock solid at&gt;60%, and net margins were&gt;40%. Revenues and profits were up 1.3%/51% YoY.
Cash and Investments at 4.8 bn pesos account for 32% of the market capitalization. The cash will aid in acquiring the remaining 79% stake in PDS.
Trading at 19x/17x FY23e/24e and a dividend yield of 5.3%/5.9%, there are several catalysts to drive earnings over the next few years (and investors are paid to wait). 


Philippines Exchange (PSE PM): Updates from Q3/Q4, Catalysts Lining Up for Long-Term

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)