Trading Guide Philstocks Research

JUSTINO B. CALAYCAY, JR
Date : February 10 – February 21, 2020 VP-Head, Research & Traditional Sales
(632)8588-1962

ACEPH TRADE  Expansion through acquisitions

brighten ACEPH’s prospects
JAPHET LOUIS O. TANTIANGCO
Sr. Research Analyst
(632)8588-1927
Last Traded Price P 2.14
PIPER CHAUCER E. TAN
Entry Point P 2.20 - 2.26  MACD signals a further rally with a
Engagement Officer/Research Associate
possible breach of its 2.20 - 2.26 (632)8588-1928
Target Price P 2.44
resistance.
Potential Upside / Downside 10.90% - 7.96% CLAIRE T. ALVIAR
 Risks however lies with the Research Associate
Net Foreign Position* P4.89 M (632)8588-1925
impending Death Cross.
52 wk High and Low 2.88 - 1.95 Ground Floor, East Tower
20 MA Volume 4.51 M  Best strategy is to take positions on PSE Center, Tektite Towers
break out then trade to next Ortigas Center, Pasig City
P/E Ratio - PHILIPPINES
resistance at 2.44
P/B Ratio 1.55x DISCLAIMER
* YTD as of February 7, 2020
YTD performance -8.15% The opinion, views and recommendations
contained in this material were prepared by
the Philstocks Research Team, individually

AGI TRADE and separately, based on their specific

sector assignments, contextual framework,
personal judgments, biases and prejudices,
Last Traded Price P10.70 time horizons, methods and other factors.
 Short term upside for AGI The reader is enjoined to take this into
Entry Point P10.50 - P11.00 account when perusing and considering the
contents of the report as a basis for their
Target Price P 12.00  Net foreign transaction on a positive
stock investment or trading decisions.
note despite negative sentiment to the Furthermore, projection made and presented
Potential Upside / Downside 12.16%
general market in this report may change or be updated in
Net Foreign Position* P111.79 M between the periods of release. Ergo, the
 Cononavirus and other risk may linger to validity of the projections and/or estimates
52 wk High and Low 10.18 - 16.50 mentioned are good as of the date indicated
AGI.
20 MA Volume 4.598 M and may be changed without immediate
* YTD as of February 7, 2020 notification.
P/E Ratio 6.59
This report is primarily intended for
P/B Ratio 0.579 information purposes only and should not be
considered as an exclusive basis for making
YTD performance (8.23%) investment decision. The recommendations
contained in this report is not tailored-fit any

SSI BUY
particular investor type, situation, or
objective and must not be taken as such.
Determining the suitability of an investment
remains within the province of the investor.
Last Traded Price P2.19 Our estimates are based on information we
Entry Point P1.80– P2.10  Earnings growth continues despite believe to be reliable. Nevertheless, nothing
in this report shall be construed as an offer
Target Price P3.17-P3.37
decreasing total floor area. of a guarantee of a return of any kind and at
any time.
Potential Upside / Downside 45%- 53%  Undervalued in terms of P/E and
Net Foreign Position* P20.55 M P/B ratio.
Rating Definitions:
52 wk low and high 1.80 - 4.30  It may decline to its 52-week low. BUY - More than 15% upside base on the target price
in the next 9-12 months
20 MA Volume 2.015M
* YTD as of February 7, 2020
HOLD - 15% or less upside or downside in the next
P/E Ratio 9.83
9-12 months
P/B Ratio 0.64
SELL - More than 15% downside base on the target
YTD performance -21.22% price in the next 9-12 months
TRADE - A potential 10% and above short-term upside
base on entry price and selling price.

Philstocks Research 2020 1 |Page

AC Energy Philippines, Inc. [PSE:ACEPH]
Philstocks On-Balance View: TRADE

Initial target Price: P2.44

Entry Price: P2.20 - P2.26
Cut loss Point: P2.09 - P2.15 (5% below acquisition price)
Research Analyst: Japhet O. Tantiangco

OUR TAKE
We recommend a TRADE on ACEPH amid the improving prospects of the firm. While current fundamentals are dismal, the continuous
expansion through acquisitions in line with its 2 GW renewable energy capacity target by 2025 sets the firm up for a bright future. Chartwise, the
share nears its 2.20 - 2.26 resistance range with the MACD showing a further rally is still possible. Risk however lies with the narrow gap
between the 50-day and 200-day EMA, an impending Death Cross which could lead to a bearish turnaround for the share. The best strategy is
to take positions once a breakout at the current resistance occurs, then trade up to its next resistance at P2.44.

FINANCIAL AND OPERATING RESULTS

ACEPH
In Million Pesos (Except for EPS) September 30, 2019 December 31, 2018 % Change
Current Asset 6,827.25 5,165.26 32.18%
Total Asset 20,523.26 18,924.70 8.45%
Current Liability 3,226.19 2,963.27 8.87%
Total Liability 10,135.28 10,553.25 -3.96%
Total Equity 10,387.98 8,371.45 24.09%
9M 2019 9M 2018 % Change
Revenue / Sales 11,538.31 11,617.77 -0.68%
Operating Income -359.23 -360.20 -0.27%
Net Income -353.10 -159.48 -121.41%
EPS -0.06 -0.03 -100.00%
Source: Phinma Energy Corporation 3rd quarter/1st 9 month financial and operating results

FINANCIAL HIGHLIGHTS

5.00 10.00%
4.50
4.00
3.50
3.00
2018 2018
2.50 0.00%
2.00 2019 2019

1.50
1.00
0.50
0.00 -10.00%
Current Ratio Asset Turnover Debt to Asset Debt to Equity Equity Multiplier Operating Margin Net Margin ROA ROE

Source: Phinma Energy Corporation 3rd quarter/1st 9 month financial and operating results

Philstocks Research 2020 2 |Page

INVESTMENT NARRATIVES
 Continuous expansion through acquisitions, in line with its goal of 2 GW renewable energy capacity by 2025 brightens ACEPH’s prospects.

 The Philippine Competition Commission (PCC) has approved ACEPH’s plan to acquire Philippine Investment Alliance for Infrastructure
(PINAI)’s 27.07% stake in Philippine Wind Holdings Corporation which owns 67% of the 81 MW wind farm powered North Luzon
Renewables Corporation.

 ACEPH is also acquiring PINAI’s full ownership interest on Negros Island Solar Power, Inc. and San Carlos Solar Energy, Inc. Both operate
a solar farm in Negros Occidental, the former 80 MW, the latter 45 MW. The acquisition would involve each firm’s 70% of the outstanding
capital stock subject to PCC’s approval.

TECHNICAL ANALYSIS

 ACEPH is trying to regain momentum, bouncing from its 1.95 support after declining from its October 21, 2019 peak of 2.89. The share’s
initial challenge would be to take its 2.20 - 2.26 resistance range where its 200-day exponential moving average (also a dynamic
resistance) lies.

 The crossing of the MACD line above the signal line implies that the upward momentum would be sustained.

 The OBV, albeit flattened since the middle of October 2019, still shows an accumulation bias. The 14-day RSI, is also building up

RISKS
 Volatility in energy prices with a downward bias as the economy faces early year headwinds led by the Coronavirus’ impact.

 Capital intensive nature of business which could squeeze net cash flows.

 An impending Death Cross on the ACEPH’s charts which would signal a bearish turnaround if it pushes through.

Philstocks Research 2020 3 |Page

Alliance Global Group Inc. [PSE:AGI]
Philstocks On-Balance View: TRADE
Initial target Price: P12.00
Entry Price: P10.50 - 11.00
Cut loss: P10.18
Research Analyst: Piper Chaucer E. Tan

OUR TAKE
We recommend a TRADE for AGI since we are seeing short-term upside given by its technical signals and also Net Foreign transaction reveals
that despite the issue on the POGO and its effect in the casinos of Corona Virus ,for the past nine trading days it has registered buying,
indication that the recent bounce of AGI may be sustainable for the short-term. We also reiterate a BUY recommendation for AGI since it has
strong fundamentals. This is advised for investors looking for long0term position (accumulate and short term position (range trade).

FINANCIAL AND OPERATING RESULTS

Balance Sheet (In Million PHP except per share) September 30, 2019 December 31, 2018 % Change
Total Assets 609,369.83 588,251.19 3.59%
Total Liabilities 313,447.16 297,678.53 5.30%
Total Equity 295,922.66 290,572.66 1.84%
Retained Earnings (Deficit) 130,359.86 117,531.88 10.91%
Book value per Share (BVPS) 30.13 29.31 2.80%

Income Statement (In Million PHP except per share) 9M 2019 9M 2018 % Change

Revenue 123,470.84 104,321.13 18.36%

Net Income Attributable to the Parent 12,827.98 12,028.26 6.65%
Earnings per Share (EPS) 1.30 1.20 8.33%

Source: Quarterly Report 17-Q

FINANCIAL HIGHLIGHTS

Source: Quarterly Report 17-Q

Philstocks Research 2020 4 |Page

INVESTMENT NARRATIVES
 The business of AGI and its exposure to real-estate, Food and beverage and Casinos is relatively one of the key consideration that our
economy is geared towards domestic consumption that AGI has interests

 Attractive valuations also in favor for AGI since it has been on its 3 year low and also below the average of 14x against its peers
considering that 9M 2019 results were strong results from topline to bottom line figures

 Driven by the strong demand coming from Philippine Offshore Gaming Operators (POGO) and retails space, we think that if this will
continue earnings for AGI will grow

TECHNICAL ANALYSIS

 We see a trading range from 10.40 - 12.00 which investors can take advantage the short term upside of the share price movement

 Net Foreign transactions reveals that the recent bunce off of AGI may be sustained given that the smart money has been slowly kicking in

 OBV shows accumulation but caveat if net foreign transaction turns to selling.

 RSI also nearing its oversold levels signaling a bounce for AGI

 If 10.18 cutloss price is broken, we can expect that AGI may go down to below 10.00 levels

RISKS

 If POGO issue will escalate and turns to total ban then this would have an adverse effect on the office market since FY 2019 data shows that
it has already tover taken IT-BPO has the highest take for the FY 2019. This will not just for AGI but also property companies with dealing
with POGO

 If coronavirus issue will not normalize this will have a negative effect on casinos since majority of the players were foreigners and also for
tourism since AGI has hotel exposure

 Regulatory risk is also a main issue just like in ALI, if the government will scrutinize dealing of property companies with the government. If
BGC will be under review then we think this will have a negative sentiment for AGI and MEG.

Philstocks Research 2020 5 |Page

SSI Group, Inc. [PSE:SSI]
Philstocks On-Balance View: Buy
Initial target Price: P3.17—P3.37
Entry Price: P1.80– 2.10
Cut loss: 1-2% of your total capital
Research Analyst: Claire T. Alviar

OUR TAKE
BUY SSI given the continuous positive trend of its top line and bottom line growth. It is already undervalued in terms of P/E and P/B ratio.
Foreigners are still buyers on year-to-date’s basis. However, technical shows that it may further decline to its 52-week low of P1.80.

9M 2019 VS. 9M 2018 FINANCIAL AND OPERATING RESULTS

Balance Sheet (In Million PHP except September 30, 2019 December 31, 2018 % Change

Total Assets 19,166 18,253 5.00%

Total Liabilities 7,891 7,435 6.13%
Total Equity 11,275 10,817 4.23%
Retained Earnings (Deficit) 5,473 5,001 9.42%
Book value per Share (BVPS) 3.41 3.27 4.28%
Income Statement 9M 2019 9M 2018 % Change
Revenue 14,855 13,791 7.72%
Net Income 521 368 41.65%
Earnings per Share (EPS) 0.16 0.11 45.45%

Source: Quarterly Report 17-Q

FINANCIAL HIGHLIGHTS

Source: Quarterly Report 17-Q

Philstocks Research 2020 6 |Page

INVESTMENT NARRATIVES
 Profitability improves shown by the ratios: GP and NP margins for the first nine months last year are at 42.34% and 3.51%, better than
9M18’s 42% and 3.01%, respectively.

 Positive trend continues with strong top line and bottom line driven by the healthy consumer demand, despite the 3% decline in its total
floor area. It focuses on store openings on developed brands in developed locations.

 Current P/E is at 9.83x, cheaper compared with 5-year average of 25.77.

 P/B ratio is undervalued at 0.64, or lower than 1.

 Y/d net foreign buying stood at P20.55 million.

TECHNICAL ANALYSIS

 It broke its support of P2.35, and went down to its second support at P2.10.

 Test BUY at this level, then wait if this returns above P2.35 or fall to the psychological support of P2.00.

 Or worst, wait for it to decline to its 52-week low of P1.80.

 Resistance is at P2.35 and second is at P2.85.

 MACD (12,26,9) is yet to cross above the signal line.

 RSI (14) is already at the oversold level; Historical data of SSI shows that most of the time, share price climbs after reaching oversold level.

RISKS

 Revenue growth may be affected negatively by decreasing gross selling space and number of stores.

 It may decline to its 52-week low of P1.80, if P2.10 support does not hold.

Philstocks Research 2020 7 |Page