Target Price: PHP 16.15

Last Traded Price: PHP 14.34
P/E Ratio: 8.21x
P/B Ratio: 0.52x
Support: PHP 14.00 – 14.30
Resistance: PHP 16.00
MTD Performance: -2.71%
YTD Performance: -10.26%

  • Weak demand from the East Zone Concession has affected its earnings in the first quarter.
  • Rebound is possible after a 4% decline yesterday
  • In the long run, it is expected to recover along with the economy

Revenues decreased 12% year on year to P4.8 billion in the first quarter of 2021; net income decreased 8% year on year to P1.29 billion, due to lower contributions from the East Zone Concession, which overshadowed better production from the NonEast Zone companies.

For the first six months of 2021, we continue to anticipate slow demand, which would weigh on the company’s profits. On the bright side, stabilization is anticipated, coupled with an economic recovery. Additionally, it is undervalued in terms of P/E and P/B ratios, with respective values of 8.21x and 0.52x.

It took a beating in 2019 due to political threat, but now that it has secured a Revised Concession Agreement extending the concession term until July 2037, the Covid-19 pandemic is the greatest risk to its industry at the moment.

Support is established at P14.30, while resistance is found at P16.15. Psychological support is priced at P14.00. Since falling below the 50-day and 200-day exponential moving averages, the share price continues to trend downward. Set a cut-off price that is 5-7 percent less than your purchase price.

Material in this article is obtained from sources we believe to be reliable, but its reliability or precision cannot be guaranteed. This is for the sole purpose of providing details and does not provide an offer from us to buy or sell securities mentioned in this document.


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