Fall of a giant: Ayala Land loses premium as Sy-blings’ SM Prime, Frederick Go’s Robinsons Land take top spot among property stocks – JP Morgan

 

JP Morgan is projecting a seismic shift in Philippine property stocks with former industry leader Ayala Land Inc. losing its premium valuation among peers.

“ALI’s premium valuation was anchored on profit growth consistency and outperformance relative to peers; this is no longer the case today,” said JP Morgan in a June 30 report which has been widely shared on social media.

After leading the industry in profit growth since 2009, JP Morgan expects ALI to place last among the Big Five property companies in the country in terms of net income growth.

ALI is the only Big Five property player to post negative growth in profits (minus four percent) from 2019 to 2024 after posting an industry-leading 23 percent average growth rate from 2009 to 2019.

Robinsons Land Corp. (RLC) led by bilyonaryo Frederick Go will have the highest profit growth rate through 2024 at seven percent, followed by SM Prime Holdings (SMPH) of the Sy family with five percent, Megaworld Corp. of ultra bilyonaryo Andrew Tan with two percent.

Filinvest Land Inc. of the Gotianun family is expected to have a zero growth average from 2019 to 2024.

JP Morgan said it preferred SMPH and RLC with their high, recurring income streams (leases) over ALI due to its high reliance on residential sales for growth.

It blamed ALI’s fall from grace to “murky growth outlook, elevated residential inventory and cancellations.”

JP Morgan reckoned it would take more than 21 months for ALI to sell its inventory of residential properties.

Profit margins are likely to erode further as ALI will unlikely be able to increase its average selling price and will be forced to give easy payment terms in view of the weak demand and high interest rates.

Based on its estimates, JP Morgan said SMPH now has the highest premium valuation among the Big Five (24 times price/earnings ratio for 2023) with ALI falling to second with a P/E of 17 (from a an average P/E of 27.8 from 2009 to 2019. RLC is third with a P/E ratio of 8.6 times in 2023 followed by FLI (4.3 times P/E) and MEG (4.2 times P/E).

SOURCE: Bilyonaryo

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Sys, Ayalas, Gokongweis, 7 business groups back return to office

Some seven business organizations and six companies welcomed the government’s push for people to return to the workplace which they said was a “significant step towards the country’s journey to post-pandemic normalcy.”

n a statement, the business groups said they were looking forward to seeing an increase in business activity with employees returning to the workplace.

“The path to recovery, we aver, begins with the presence in the business and commercial centers of our country’s workers,” they said.

These businesses include Ayala Land, SM Prime, Robinsons Land, Chamber of Real Estate and Builders Association Inc., Federation of Filipino Chinese Chambers of Commerce and Industry, Financial Executives Institute of the Philippines, Go Negosyo, Management Association of the Philippines, Megaworld, Philippine Constructors Association, Philippine Retailers Association, Philippine Chamber of Commerce and Industry and Resto PH.

They said the experience from Typhoon Odette last year showed that working from home is not meant for all businesses and should be temporary.

“Economic momentum has been established and we are now within easier reach of the prosperity we enjoyed in 2019. We encourage the public to now venture out of their homes while still maintaining safety protocols,” they said.

 SOURCE: Bilyonaryo

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Sy-blings’ property arm heads into 2022 with strong growth: SM Prime profit jumps 21% on higher mall revenues

Integrated property developer SM Prime Holdings Inc. delivered a strong performance last year with its net income growing 21 percent to P21.8 billion on higher contributions from the mall business.

Consolidated revenues reached P82.3 billion, almost the same level as 2020.

Operating income rose 11 percent to P32.4 billion from P29.1 billion

The residential business under SM Development Corp. (SMDC) still accounted for the bulk of SM Prime’s total revenues at P45.9 billon, lower than its previous year’s contribution as sales take-up slightly declined to P98.9 billion.

Revenues from the mall business amounted to P24.1 billion, up 2.1 percent from the previous year amid the easing of mobility restrictions in most parts of the country in November. Rent income improved by six percent to P23 billion.

Overseas, SM Prime’s mall operations in China booked a net income of RMB 0.2 billion, up 154 percent as revenues jumped 20 percent to RMB 800 million as businesses quickly returned to normalcy after containing the coronavirus.

Meanwhile, revenues from offices, hotels, and convention centers, remained resilient at P6.6 billion or four percent higher than the previous year.

“As we begin to see the result of joint effort by the government and private organizations to manage the pandemic, SM Prime is set to pursue business expansions with broader funding options available locally and internationally. We will continue to work with the government in helping the nation rebound form the challenges in the past two years,” said Jeffrey C. Lim, SM Prime president.

SOURCE: Bilyonaryo

 

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From recovery to sustainable growth: Sy-blings’ real estate arm posts 9% rise in nine-month profit

Integrated property developer SM Prime Holdings Inc. grew its net income by nine percent in the first nine months to P15.6 billion on higher reservation sales.

Consolidated revenue, however, declined by six percent to P56.8 billion as the group’s shopping malls continued to enjoy low foot traffic amid the pandemic.

 “SM Prime continues to develop new ways and solutions in its businesses by developing sustainable programs that provide safe and secure environment for all of its stakeholders. This is in line with our anticipation of welcoming more people in our establishments, primarily in our malls and other commercial facilities, where thousands of our partner-tenants can showcase their products and services this coming Holidays Season,” said Jeffrey C. Lim, SM Prime president.

The residential business, led by SMDC, accounted for 56% or P32.1 billion of SM Prime’s consolidated revenues, down six percent from last year’s P34.2 billion.

SMDC’s reservation sales, however, grew 14 percent to P76.3 billion in the first nine months due to strengthened online presence and continuous construction of projects.

Revenues from the shopping mall business declined by 14 percent to P15.8 billion, weighed down by the reimplementation of stricter community quarantine in August.

The China mall business likewise saw revenue jump by 28 percent to P4.6 billion.

Meanwhile, revenues from the hotels and convention centers business reached P900 million.

“As the country continues to survive the pandemic, SM Prime will remain optimistic by providing support to the government as well as convenience, services and entertainment to its customers,” Lim said.

SOURCE: Bilyonaryo

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SM Prime plans P10B bond offer

Integrated property developer SM Prime Holdings Inc. is returning to the local debt market with a new bond offering amounting to as much as P10 billion.

Integrated property developer SM Prime Holdings Inc. is returning to the local debt market with a new bond offering amounting to as much as P10 billion.

In a statement, SM Prime said it filed with the Securities and Exchange Commission to proceed with the third tranche issuance of fixed-rate bonds amounting to P5 billon with an oversubscription option of up to P5 billion.

The bonds, which have a maturity of seven years, were assigned a PRS Aaa rating by the local credit watcher Philippine Rating Services Corp.

A rating of PRS Aaa, the highest rating assigned by Philratings, means that the issuer’s capacity to meet its financial commitment on its obligations is extremely strong.

SM Prime sad the issuance is part of its three-year debt securities program of up to P100 billion.

SOURCE: Bilyonaryo

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