THU 30 JAN 2020

Top Story:

BPI: 4Q19 earnings end in line with estimates

(AS OF JAN 29, 2020)

Other News: INDICES

Close Points % YTD%
PSEi 7,462.31 -6.39 -0.09 -4.52
BDO: BDO raises record Php40.1Bil from bonds All Shares 4,425.06 -10.61 -0.24 -4.83
CHP: CHP raises Php13Bil in stock rights offer Financials 1,797.65 -5.47 -0.30 -3.54
Holding Firms 7,160.49 -20.03 -0.28 -5.68
ISM: Dito ready to roll out by July
Industrial 9,356.57 -58.10 -0.62 -2.89
Mining & Oil 7,594.26 -218.52 -2.80 -6.15
Property 3,926.35 20.19 0.52 -5.49
Services 1,518.86 3.00 0.20 -0.80
Market Summary:
Dow Jones 28,734.45 11.60 0.04 0.69
S&P 500 3,273.40 -2.84 -0.09 1.32
The local equities market extended its decline on Wednesday as concerns over the
Nasdaq 9,275.16 5.48 0.06 3.37
coronavirus outbreak from China persist.

The PSEi lost 6.39 points or 0.08% to close at 7,462.31. The main drags were AC (-1.44%), INDEX GAINERS
Ticker Company Price %
URC (-1.21%), MER (-2.48%), SECB (-1.87%), and SMC (-2.52%). On the other hand, these
FGEN First Gen Corporation 21.45 1.66
were partially offset by gainers such as ALI (+1.20%), SMPH (+0.63%), JGS (+1.01%), AEV BLOOM Bloomberry Resorts 9.99 1.42
(+1.18%), and BDO (+0.33%). ALI Ayala Land inc 42.00 1.20
AEV Aboitiz Equity Ventures 51.50 1.18
JGS JG Summit Hldgs Inc 75.00 1.01
Value turnover increased to Php5.0Bil from Php4.4Bil in the previous session. Meanwhile,
foreigners continued to sell shares, liquidating Php351.0Mil worth of shares.
INDEX LOSERS
Ticker Company Price %
SCC Semirara Mining 20.00 -3.15
SMC San Miguel Corp 143.30 -2.52
MER Manila Electric Company 275.00 -2.48
RRHI Robinsons Retail Hldgs Inc 77.60 -2.02
DMC DMCI Hldgs Inc 5.97 -1.97

TOP 5 MOST ACTIVE STOCKS

Ticker Company Turnover
SMPH SM Prime Hldgs Inc 708,515,100
ALI Ayala Land Inc 277,274,500
BDO BDO Unibank Inc 272,360,400
SECB Security Bank Corp 209,370,700
AC Ayala Corporation 208,957,900

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.
 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 30 JAN 2020

Top Story:

John Martin Luciano BPI: 4Q19 earnings end in line with estimates
Senior Research Analyst
4Q19 earnings end in line with estimates. BPI’s 4Q19 net income grew 11.6% y/y to
Bank of the Phil Islands
Php6.8Bil, bringing the full-year profits higher by 24.8% y/y to Php28.8Bil. This ended in
BUY
line with both COL and consensus estimates, representing 100.7% and 101.3% of full-year
Php106.00
forecasts, respectively. Although the bank has not yet reported its official net interest
income, we estimate that this expanded by ~13% y/y in the fourth quarter, driven by the
8.9% y/y growth in its loan portfolio and ~10 bps q/q expansion in NIMs. Meanwhile,
loan growth was driven mainly by consumer loans which expanded by 13.4% y/y, while
corporate and SME loans grew 7.9% and 5.8%, respectively. The full-year results translate
to a ROE of 11.1%.

We will be releasing a more detailed report following the earnings briefing on Friday.

Maintain BUY. We reiterate our BUY rating on BPI with a FV estimate of Php106/sh based
on 1.65X 2020 P/BV. We continue to like BPI because it is poised to take advantage of the
country’s healthy economic growth on the back of its strong and highly liquid balance
sheet as well as its large branch network. We believe this gives the bank an advantage
in growing its loan portfolio given its access to low-cost funding as seen in its high
CASA ratio of 69.1% as of end-December 2019. Furthermore, the bank is operationally
efficient as it has the lowest cost to income ratio among its peers as it is quite prudent in
expanding its branch network.

Other News:

Research Analysts BDO: BDO raises record Php40.1Bil from bonds

John Martin Luciano, CFA
Frances Rolfa Nicolas BDO raised Php40.1Bil through the issuance of fixed rate bonds, which is 8x their initial
Justin Richmond Cheng offer of Php5Bil. The bonds have a tenor of 2.5 years carrying a yield of 4.408% per
Adrian Alexander Yu
annum. HSBC served as the sole lead arranger in this fund raising activity while BDO
Kerwin Malcolm Chan
Unibank, BDO Private Bank, and HSBC served as the selling agents. BDO President and
CEO Nestor Tan stated that the bank continues to diversify its funding sources for their
business expansion plans. (Source: Inquirer)

COL Financial Group, Inc. 2

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 30 JAN 2020

CHP: CHP raises Php13Bil in stock rights offer

In a disclosure to the PSE, CHP announced that it has completed its stock rights offering
last week and raised Php12.8Bil from selling 8.3Bil common shares. The proceeds will
be used to fund CHP’s expansion of its Solid cement plant and to pay outstanding debt
to its parent company, Cemex Asia B.V. The offer shares are targeted to be listed at the
Philippine Stock Exchange on March 4. (source: Businessworld, CHP)

ISM: Dito ready to roll out by July

The Department of Information and Communications Technology (DICT) received

assurance from Dito Telecommunity’s top executives on the telco’s ability to roll out
by July. A closed-door meeting was called by DICT Secretary Gregorio Honasan with
the executives of Dito to discuss the status of the telco’s roll out. Some of the updates
reported by Dito included their tower building activities, secured deals for infrastructure
development, construction updates on network operation centers, rollout of crucial
infrastructure, and projected timetables. After the discussions, Honasan mentioned that
Dito is on track to deliver its promise of cheaper and more efficient service to the public.
(Source: Inquirer)

COL Financial Group, Inc. 3

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 30 JAN 2020

Calendar of events

JANUARY 2020
SUN MON TUE WED THU FRI SAT

1 1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 17 18 19
19 20 21 22 23 24 25
26 27 28 29 30 31

KEY EVENTS HOLIDAY

JAN 1 JAN 21
HOLIDAY: NEW YEAR CAT: ANNUAL SHAREHOLDERS MEETING

JAN 2 JAN 25
EMP: EX-DATE PHP0.05 CASH DIVIDEND HOLIDAY: CHINESE NEW YEAR

JAN 7 JAN 29
APL: ANNUAL SHAREHOLDERS MEETING TFC: ANNUAL SHAREHOLDERS MEETING

COL Financial Group, Inc. 4

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 30 JAN 2020

I M P O R TA N T R AT ING DEFINITIONS
BUY
Stocks that have a BUY rating have attractive fundamentals and valuations based on our analysis. We expect the share price to outperform the market in the
next six to 12 months.

HOLD
Stocks that have a HOLD rating have either 1) attractive fundamentals but expensive valuations 2) attractive valuations but near-term earnings outlook might
be poor or vulnerable to numerous risks. Given the said factors, the share price of the stock may perform merely in line or underperform in the market in the
next six to twelve months.

SELL
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.

I M P O R TA N T DISC L AIM ER
Securities recommended, offered or sold by COL Financial Group, Inc. are subject to investment risks, including the possible loss of the principal amount invested.
Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and said information may
be incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are
subject to change without prior notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of
a security. COL Financial and/or its employees not involved in the preparation of this report may have investments in securities of derivatives of the companies
mentioned in this report and may trade them in ways different from those discussed in this report.

CO L R E S EAR C H T EAM

APRIL LYNN TAN, CFA

VP & HEAD OF RESEARCH
april.tan@colfinancial.com

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA

DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com

JOHN MARTIN LUCIANO, CFA FRANCES ROLFA NICOLAS JUSTIN RICHMOND CHENG
SENIOR RESEARCH ANALYST RESEARCH ANALYST RESEARCH ANALYST
john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com justin.cheng@colfinancial.com

ADRIAN ALEXANDER YU KERWIN MALCOLM CHAN

RESEARCH ANALYST RESEARCH ANALYST
adrian.yu@colfinancial.com kerwin.chan@colfinancial.com

CO L F IN ANC IAL G R O UP, IN C.

2402-D EAST TOWER, PHILIPPINE STOCK EXCHANGE CENTRE,
EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
TEL NO. +632 636-5411
FAX NO. +632 635-4632
WEBSITE: www.colfinancial.com

COL Financial Group, Inc. 5