STRENGTHS

One of the strengths of SMC is that they’re already known in the

business industry. Founded in 1890, San Miguel Brewery Inc. (the
original name) was the first brewery in the Southeast Asia. They
were known as the largest selling beer in the Philippines and Hong
Kong.

They own San Miguel Food and Beverage Inc., the Philippines’
leading food and beverage company, They’re also a majority owner
of Petron Corporation, the market leader in the fuels and oil
industry in the Philippines, and a strong player in the Malaysian
downstream oil market. Their power subsidiary, SMC Global Power
Holdings Corp has a full spectrum of three IPPA contracts and
greenfield power plants. The company’s portfolio has a combined
capacity of 4,197 MW as of the end of 2018, accounting for 25%
of the Luzon grid, 9% of the Mindanao grid, and 19% of the
national grid.

They also have an infrastructure company, SMC infrastructure,

handles the construction, management, and operation of the
country’s largest infrastructure network, its current portfolio
includes: The Tarlac-Pangasinan-La Union Expressway (TPLEX),
the Southern Tagalog Arterial Road (STAR), South Luzon
Expressway (SLEX), the Skyway System, and the NAIA Expressway
(NAIAX), Boracay Airport, the MRT-7 rail and road project, and the
Bulacan Bulk Water Supply Project.

They also have over 24,539 employees in their company, making

them one of the nation’s largest employers. SMC also produces
close to 300 products including: B-MEG, Wilkins, Viva, Coca-cola
and Eight O’clock. SMC also has 3 core business, Beverages, which
includes beer, hard liquor, soft drinks, bottled water and Fruit
Juices. Next is Food & Agribusiness – chickens, feeds, pork and
beef. And lastly packaging, which includes glass, metal, plastic
paper products, flexible pouches and laminates. As of March 2019,
SMC revenues reached more than P1-trillion, they also had P26.2
billion net income as of August 2019.
WEAKNESSES
Weaknesses of SMC includes their large market share. Gains or
losses in market share can have significant impacts on a
company's stock performance, depending on industry conditions.
Market share is essentially the percentage of an industry's total
sales that the company earns.

They’re also at risk of losing their international assets. One of the

reasons is because of Legal issues that they are involved in. San
Miguel shares are also involved in the controversial Coco Levy Case
(Sandiganbayan Civil Case No. 33), which is actually subdivided
into a total of eight cases involving different parties and properties.
Arguably the most important case is Case No. 33-F, which involves
51% of the shares of San Miguel. This majority stake at San Miguel
has been further subdivided into three separate litigations, each of
which reaching the Supreme Court in highly contentious
proceedings.

The first case involved 4% of San Miguel shares, which, in the case
of San Miguel Corporation vs. Sandiganbayan, was awarded by the
Supreme Court to the government. The second case, Republic of
the Philippines vs. Sandiganbayan and Eduardo Cojuangco
Jr., involved a 20% block that the Supreme Court, voting 7-4,
awarded to Eduardo “Danding” Cojuangco. The most recent High
Court pronouncement came early this year, Philippine Coconut
Producers Federation, Inc. (COCOFED) vs. Republic of the
Philippines, where the Court, voting 11-0, declared that the
remaining 27% of San Miguel is owned by the government. (Note:
The 27% had been diluted to 24% due the government's failure to
subscribe to the increased authorized capital stock of San Miguel).

Credit rating downgrade is also a weakness to SMC. You see, a

corporate credit rating is an opinion of an independent agency
regarding the likelihood that a corporation will fully meet its
financial obligations as they come due.
A company's corporate credit rating indicates its relative ability to
pay its creditors, so if the company is experiencing a rating
downgrade, it will affect all financial parts of the company. Usually,
a rating downgrade is immediately followed by a fall in the
company’s stock price, impacting the equity investments in the
short run.
OPPORTUNITIES
One of the great opportunities for SMC is engaging to more profit-
oriented business.