I Philippine Equity Research Weekly Notes

Monday, 17 March 2025

MARKET COMMENTARY: April Tan, CFA

Chief Equity Strategist

Market rebound on pause due to U.S. market

weakness Indices
Close Points % YTD%
After rising strongly the previous week, the market moved sideways over PSEi 6,294.11 -4.18 -0.1% -3.6%
the past five trading days, with the PSEi index correcting 4.18 points or 0.1% All Shares 3,721.60 -2.60 -0.1% -0.7%
Financials 2,434.90 71.43 3.0% 12.9%
to 6,294.11.
Holding Firms 5,210.88 -40.32 -0.8% -7.6%
Industrial 8,753.66 -20.01 -0.2% -6.0%
The market’s momentum was negatively affected by the poor performance Mining & Oil 8,941.03 366.24 4.3% 14.2%
of U.S. stocks. Last week, the S&P 500 fell by 2.3% and is now down by Property 2,229.46 -44.90 -2.0% -6.2%
4.1% for the year-to-date period. U.S. stocks fell in response to President Services 2,052.49 -29.28 -1.4% -1.4%

Trump’s order to impose sizeable tariffs on imports from various countries

Dow Jones 41,488.19 -1,313.53 -3.1% -2.5%
led by Canada and Mexico and on numerous products including aluminum S&P 500 5,638.94 -131.26 -2.3% -4.1%
and steel. Most of the U.S.’s trading partners ordered retaliatory tariffs in Nasdaq 17,754.09 -442.13 -2.4% -8.1%
response.
PHP:USD 57.26 0.05 0.1% -1.0%
Dollar Index 103.72 -0.12 -0.1% -4.4%
On the positive side, foreign investors remained net buyers for the second
Oil ($) 67.18 0.14 0.2% -6.3%
week in a row, acquiring Php1.9 Bil worth of stocks.
Gold ($) 2984.16 75.06 2.6% 13.7%

Average daily value turnover remained thin at Php6.4 Bil. BPS BPS
Close W/W YTD
The top five index losers were MONDE (-7.3%), GLO (-5.7%), PGOLD (-5.0%),
PH 10-Yr Yield (%) 6.23 2.04 5.37
LTG (-5.0%), and ALI (-4.9%). US 10-Yr Yield (%) 4.31 1.10 -25.69

GLO fell on news earlier this month that the BSP has introduced draft Index Gainers
guidelines for digital marketplace activities prohibiting electronic money Ticker Company Price %
issuers (EMIs) such as GCash from offering any products linked to gambling. BLOOM Bloomberry Resorts Corp 3.66 10.9%
Meanwhile, LTG and ALI corrected after posting significant gains the week BDO BDO Unibank Inc 165.00 4.8%
AC Ayala Corp 605.00 4.0%
before.
BPI Bank of the Philippine Islands 136.00 3.5%
JFC Jollibee Foods Corp 260.00 2.8%
On the other hand, the top five index gainers were BLOOM (+10.9%), BDO
(+5.4%), MER (+4.5%), AC (+3.9%), and BPI (+3.5%). Index Losers
Ticker Company Price %
BLOOM rebounded after performing poorly earlier this year due to its MONDE Monde Nissin Corp 7.20 -7.3%
disappointing earnings performance and speculation that it would be GLO Globe Telecom Inc 2106.00 -5.7%
PGOLD Puregold Price Club Inc 26.70 -5.0%
removed from the PSEi index in the next rebalancing. The stock also
LTG LT Group Inc 11.88 -5.0%
responded favorably to the company’s disclosure that it is preparing to ALI Ayala Land Inc 22.30 -4.9%
launch an online platform that will expand its presence in the electronic
gaming space. Top 5 Most Active Stocks
Ticker Company Turnover
All eyes are now focused on the U.S. market to see whether its ongoing BDO BDO Unibank Inc 4,420.92

weakness is only temporary or if it is the start of a more serious correction. ICT International Container Termin 2,784.21
ALI Ayala Land Inc 2,597.97
After all, the Philippine market has always suffered from a contagion every BPI Bank of the Philippine Islands 2,305.51
time the U.S. market performs poorly. JFC Jollibee Foods Corp 991.22

(as of March 10-14, 2025)

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed
outside of the COL Financial website as these may be subject to tampering or unauthorized alterations.
Weekly Notes I Philippine Equity Research Monday, 17 March 2025

NOTABLE HEADLINES:

Fourth quarter earnings season: Misses outnumber beats DigiPlus Interactive

Corp.

Seven more companies released their fourth quarter earnings last week. Ticker: PLUS

Out of the seven, only two beat expectations (PLUS, LTG), while four Rating: HOLD

performed worse than expected (ACEN, AEV, JFC, DMC). RLC performed FV: Php5.57

in line with COL expectations although it missed consensus estimates.

LT Group Inc.

Exhibit 1: Last week’s earnings results Ticker: LTG

Rating: N/A
Company 4Q Income Growth FY Income Growth Vs COL Estimates FV: N/A
PLUS 93.00% 209.00% Above
LTG 47.30% 13.80% Above Robinsons Land Corporation
RLC -1.00% 3.50% In line Ticker: RLC
ACEN 46.40% 26.60% Below
Rating: BUY
AEV 39.00% 15.00% Below
JFC -4.80% 17.70% Below FV: Php19.90
DMC -24.10% -21.00% Below

Source: Listed companies, COL estimates

AC Energy Corporation
Ticker: ACEN

Out of the 31 companies that have released their fourth quarter earnings so Rating: HOLD

far, outperformers still outnumbered underperformers at 12 vs 9, although FV: Php6.12

the margin in shrinking. Ten performed in line with expectations.

Below is a summary of the latest companies’ earnings results: Aboitiz Equity Ventures, Inc.
Ticker: AEV
Rating: HOLD

PLUS: Profits beat expectations, but risks abound FV: Php62.80

Digiplus’s 4Q24 profits grew 9.6% Q/Q and 93% Y/Y as revenues jumped Jollibee Foods Corporation

24.4% Q/Q to Php23.6 Bil, the highest quarterly revenues on record. This Ticker: JFC

resulted to full year net income to surged 209% to Php12.6 Bil, beating both Rating: BUY

COL and consensus estimates. FV: Php319.00

Despite intensifying competition, PLUS managed to grow 4Q24 revenues DMCI Holdings, Inc.

by launching the first live-streamed drop ball game in the country during Ticker: DMC

the third quarter. It also benefited from the popularity of other Filipino Rating: BUY

carnival or perya games. Management also said that Super Ace Jackpot, FV: Php14.60

which was introduced in mid-2024, became a key driver of engagement,

solidifying the company’s leadership in digital gaming.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

However, risks remain as the number of online gaming license holders

increased further from 40 last quarter to 60 currently. Moreover, the
BSP wants to prohibit banks and electronic money issuers’ (EMIs) from
presenting offerings associated with gambling activities in their digital
marketplaces.

LTG: Major business segments post higher profits

LTG’s 4Q24 net income grew by 47.3% Y/Y to Php9.1Bil as major business
segments reported higher profits. PNB’s earnings grew by 11.1% y/y to
Php3.4Bil, driven by strong core lending revenues and lower provisions.
Earnings from PMFTC, LTG’s tobacco business, doubled to Php4.8Bil from
Php2.3Bil in 4Q23, owing to dividend income in excess of equity investment
amounting to Php3.4Bil. LTG’s earnings growth was further supported by
the 53.8% increase in earnings from the distilled spirits business (TDI) to
Php633Mil. For the full year, LTG’s net income grew 13.8% to Php28.9Bil,
beating consensus forecast.

Although earnings from PMFTC increased significantly in the fourth

quarter, excluding the dividend income, we estimate that net income would
have been lower by 39% Y/Y to Php1.4Bil. PMFTC continued to ship lower
volumes. During 4Q24, it reported a decline of 10.3% in shipment volumes
to 5.2Bil sticks, while industry volumes were flattish at 10.6Bil sticks. As a
result, PMFTC’s market share slipped to 49.1% from 54.2% a year ago. This
materialized as Filipinos continued to favor lower-priced brands. Note that
premium-priced Marlboro and mid-priced Fortune accounted for 56% and
10% of PMFTC’s sales respectively.

RLC: 4Q24 profits down on weakness of residential business

RLC’s 4Q24 net profit declined 1% Y/Y to Php3.20 Bil as revenues of the
residential development segment fell 35% Y/Y, more than offsetting the
growth of its malls, office leasing, hotels, and logistics businesses. For the
full year, core net profit increased 3.5% Y/Y to Php12.5 Bil, in line with COL
but below consensus estimates.

Demand for RLC’s projects was very weak in 2024. Despite launching Php21
Bil worth of projects last year, net-take up was just Php7.3 Bil. Take-up sales
of JV projects were also very weak, falling by 34% Y/Y to only Php12.9 Bil.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

ACEN: FY24 net income up 26.6%, but below expected

ACEN’s 4Q24 net income rose 46.4% to Ph1.47Bil. Earnings growth was
primarily driven by the increase in ACEN’s operating capacity. For FY24,
net income grew 26.6% to Php9.36Bil. Despite the increase, full year profits
were below COL’s forecast, but ahead of consensus estimates.

Earnings were below expected due to delays in the start of operation

of some new plants, the lower-than-expected output of ACEN’s wind
platform and lower WESM prices. Nevertheless, attributable output rose
25% to 5,596Gwh as Philippine output rose by 59.5% to 1,826Gwh while
international market output rose by 13.3% to 3,770Gwh. EBITDA margin
was maintained at 51.6% with ACEN’s net merchant selling position rising
by 57% to 1,131Gwh from 721Gwh in FY23. This was partially offset by the
15.2% drop in WESM prices to Php4.97/kwh.

Management expects ACEN to push through with its planned equity

raising exercise in 3Q25 as it aims to boosts its equity base in anticipation
of higher capex spending the next few years. Note that ACEN plans to
spend Php70Bil in capex in 2025 to further expand its portfolio. However,
the target amount to be raised and the specific method of equity raising
(such as through SRO or placement) has not yet been determined. Investor
sentiment could remain subdued in the near term due to concern over the
potential of share overhang.

AEV: AP, Pilmico and Coca-Cola drive profits higher

AEV’s 4Q24 core earnings rose 39% to Php6.7Bil. This brought FY24 core
earnings 15% higher to Php18.1Bil. Despite the increase, profits were below
COL’s forecast although in line with consensus forecast.

AEV’s earnings growth was driven by the higher profits of Aboitiz Power
and Pilmico. The company also benefited from the first-time earnings
contribution of Coca-Cola. The strong performance of the three companies
were partly offset by the lower profits of Aboitiz Infrastructure Capital and
the losses of Republic Cement.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

JFC: 4Q24 profits trail forecasts

JFC’s 4Q24 profits fell 4.8% to Php1.85Bil. This brought full year profits to
Php10.3 Bil, higher by 17.7% but below both COL and consensus estimates.

JFC’s fourth quarter earnings fell mainly due to the Php774Mil equity
loss from associates and JVs (compared to the Php83Mil equity income
recorded in 4Q23). However, management explained that the equity loss in
JVs was due to the change in treatment of Tim Ho Wan from JV to a wholly
owned subsidiary. Excluding the impact of the acquisition premium, net
income after tax would have improved by around 24%.

JFC’s revenues during 4Q24 were up 10.5% to Php73.7Bil, driven by faster

system-wide sales growth of 15.9%. Same store sales growth of the
domestic business was 7.5%, while that of international slowed to 2,8%
from 3.2% in 9M24. However, operating profits were disappointing as the
domestic business saw EBITDA drop by 4.1% for the quarter. Management
attributed the decline to JFC’s continued investment in their people,
technology, and brand-building.

DMC: Core income pulled down by SCC, DMCI Home and construction

DMC’s 4Q24 core earnings declined 24% to Php3.9Bil. This brought FY24
core earnings lower by 21% to Php18.8Bil, missing both COL and consensus
forecasts. Earnings declined mainly due to the lower net income contribution
of SCC, DMCI Homes, and the losses of the construction business. This
was partly offset by the higher profits of Maynilad and its nickel mining
business.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

TECH: Dividends for preferred shares suspended Cirtek Holdings Philippines

Ticker: TECH

Cirtek Holdings Philippines (TECH) has suspended the release of cash Rating: N/A

dividends of Preferred A, Preferred B-1, and Preferred B-2 A until Preferred FV: N/A

B-2 D shareholders until further notice. Management stated that dividend

payments were suspended to preserve resources and ensure the long-
term sustainability of the business. Nonetheless, the company stated that
it will pay its shareholders in accordance with the terms set out in their
respective Prospectuses. They noted that Preferred B-2 A until Preferred
B-2 D shareholders will receive payment for all covered periods that have
been suspended as soon as cash dividends for the shares are approved by
the company.

Economy: Rate cuts could resume in April—BSP

The BSP could resume its easing cycle as early as its next meeting on April
10, according to BSP Governor Eli Remolona. He added that the central
bank remains in an easing cycle but is proceeding with 25 bps cuts at a
time, as it remains uncertain about the total rate reductions for the year. He
also said that the BSP is ready to cut rates by 50 bps if the economy shows
signs of a hard landing. (Source: BusinessWorld)

The BSP’s dovish stance is not surprising given falling inflation and
the country’s weaker than expected 2024 economic growth. The
BSP is also under less pressure to stay on hold given the dollar’s
weakness and the peso’s strong performance recently.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

Banking Sector: Bank lending expands by a faster pace in

January

Outstanding loans of universal and commercial banks (U/KBs), net of RRP

placements with the BSP, grew by 12.8% y/y in January 2025, slightly
quicker than the 12.2% seen in December 2024. Preliminary data from
the BSP showed that loans for production activities grew 11.8% in January
from a 10.8% growth in December. This was driven by growth in lending to
key industries such as: real estate (+9.8%); electricity, gas, steam and air-
conditioning supply (+23.6%); wholesale and retail trade, repair of motor
vehicles and motorcycles (+13.9%); transportation and storage (+21.4%);
and manufacturing (+4.6%). Consumer loans, on the other hand, expanded
by 24.4% from 25% in the prior month, driven by higher credit card and
motor vehicle loan volumes. (Source: BSP)

Demand for loans is picking up due to lower interest rates. This

should lead to faster economic growth as companies increase their
borrowings to fund their investments and as consumers have the
capacity to spend more.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

FEATURED STOCK:

PLUS: Significant risks to future earnings growth DigiPlus Interactive

Corp.

PLUS continues to perform well in 2025, with the stock up by 36.3% for the Ticker: PLUS

year-to-date period. Rating: HOLD

FV: Php5.57

One of the reasons for the significant increase in its share price is its
blockbuster earnings performance. As discussed earlier, PLUS’s 2024
profits more than tripled to Php12.6 Bil from Php4.1 Bil in 2023, beating
analyst expectations.

Another reason is the growing likelihood that it will be added to the PSEi
index. There is speculation that PLUS will be added to the benchmark
index in the August rebalancing given the significant increase in its market
capitalization to Php163 Bil presently. Historically, stocks that were added
to the index experienced a sharp rise and PLUS could perform similarly if
it is added.

However, there are also several risks facing the company.

One of the major risks is intensifying competition. There are a growing

number of electronic gaming license holders in the country. From around
40 during the fourth quarter of last year, the number of license holders has
increased to around 60 at present according to PLUS. As such, competition
is intensifying. In fact, some gaming operators use aggressive promotional
tactics like sign up bonuses to entice users to their platforms.

Admittedly, PLUS was able to perform well notwithstanding the intensifying

competition during the fourth quarter as it launched new games that were
received well by Filipinos. However, with the increasing number of licenses
holders, it will be more difficult for PLUS to sustain its stellar performance,
especially since it is currently the leader in online gaming in the country
with a market share of around 50%.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

There is also a risk that the BSP will soon regulate banks and electronic
money issuers’ (EMI) digital marketplace activities, prohibiting them from
presenting offerings associated with gambling activities. Although the
proposed guidelines are still under discussion, PAGCOR warned that online
gaming operators would be negatively if the rules are implemented based
on their current version. This is because most online gaming operators
have partnered with digital marketplaces to make top ups easier and more
convenient. According to PLUS, more than 60% of its customer top-ups go
through digital marketplaces like GCash and Maya.

Finally, PLUS is no longer as cheap as it used to be. As discussed earlier,

PLUS’s market capitalization is already Php163 Bil and it is now trading at
11.5X 2025E P/E. Although the said multiple isn’t very high, neither does it
reflect the potential downside risk to profits that could materialize because
of intensifying competition and the potential ban of gambling activities in
EMI digital marketplaces. As such, although we raised our fair value estimate
on PLUS to Php35.57 from Php24.55 because of its better-than-expected
2024 earnings results, we maintained our HOLD rating on the stock.

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

March 2025
Monday Tuesday Wednesday Thursday Friday Saturday Sunday

24 25 26 27 28 1 2

3 4 5 6 7 8 9
PH - PMI (Feb) PH - CPI (Feb) PH - Unemployment PH - Foreign Reserves
(Jan) (Feb)
US - Unemployment
(Feb)
ABD - RLC

10 11 12 13 14 15 16
US - CPI (Feb) US - Federal Budget ABD - AC
Balance (Feb) ABD - UBP
ABD - AEV

17 18 19 20 21 22 23
PH - Overseas Cash PH - Budget Balance PH - BoP (Feb) US - FOMC Rate
Remittances (Jan) (Jan) Decision

24 25 26 27 28 29 30
PH - Trade Balance
(Feb)

31 1 2 3 4 5 6
#NAME?

Legend February '25 April '25

CD - Cash Ex-Date LD - Listing Date EOS - ETF Offer Start PH - Philippines M T W T F S S M T W T F S S
STD - Stock Ex-Date SRD - SRO Ex-Date EOE - ETF Offer End US - United States of America 1 2 1 2 3 4 5 6
PD - Property Ex-Date SRS - SRO Start WED - Warrant Exp Date 3 4 5 6 7 8 9 7 8 9 10 11 12 13
ABD - Analysts' Briefing SRE - SRO End 10 11 12 13 14 15 16 14 15 16 17 18 19 20
SMD - Stockholders' Meeting SRL - SRO Listing 17 18 19 20 21 22 23 21 22 23 24 25 26 27
OFS - Offer Start EDD - ETF Dividend 24 25 26 27 28 28 29 30
OFE - Offer End Ex-Date

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

Important Rating Definitions COL Research Team

BUY April Lynn Tan, CFA

First Vice President & Chief Equity Strategist
Stocks that have a BUY rating have attractive fundamentals and valuations based on our april.tan@colfinancial.com
analysis. We expect the share price to outperform the market in the next six to 12 months.
Charles William Ang, CFA
AVP & Head of Research
HOLD
charles.ang@colfinancial.com

Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive
George Ching
valuations 2) attractive valuations but near-term earnings outlook might be poor or vulnerable Senior Research Manager
to numerous risks. Given the said factors, the share price of the stock may perform merely in george.ching@colfinancial.com
line or underperform in the market in the next six to twelve months.
Richard Laneda, CFA
SELL Senior Research Manager
richard.laneda@colfinancial.com
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the
share price to underperform in the next six to12 months. Denise Joaquin
Research Analyst
denise.joaquin@colfinancial.com

COL Financial Group Inc. Charmaine Co

Research Analyst
24/F East Tower, Tektite Towers, Exchange Road, charmaine.co@colfinancial.com
San Antonio, Pasig City, Philippines 1605

+632 8636-5411 Paolo Miguel Manansala

Research Analyst
www.colfinancial.com paolo.manansala@colfinancial.com

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

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Weekly Notes I Philippine Equity Research Monday, 17 March 2025

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