Detailed Analysis

Our DCF valuation model created a 12-month target price of P11.20 per share. We are giving a BUY stock recommendation.

Though the pandemic crashed on AllHome Corp’s (HOME) revenues at the height of the country’s population quarantine in 2020, the recovery soon took the business back to pre-pandemic prices.

In HOME’s success last year, revenues in the third quarter of 2020 (3Q 2020) exceeded pre-COVID peaks. In our opinion, this sets the pace for the next quarters. It is highly probable that sales for the fourth quarter of 2020 (4Q20) also improved, particularly because the holiday season usually boosts demand for HOME goods.

We expect that with its expansions in 2021E, HOME would be more offensive. Its original aim was to open 25 new stores in 2020, however as a consequence of the pandemic, the business was only able to operate five stores at the end of last year.

With this, we anticipate good revenue and earnings results for 2021—possibly also double-digit SSSG, not just because of last year’s low base, but also because of HOME’s well-positioned shop network, which is capable of catching rising demand.

Recommendation

Our DCF valuation model yielded a 12-month Target Price of P11.20 per share. We are issuing a BUY recommendation on the stock.

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