TUE 05 MAR 2019

Top Stories:

MPI: NLEX targets Php16Bil in 2019

BLOOM: FY18 profit grows 18% on higher GGR
(AS OF MAR 04, 2019)
Other News: INDICES
Close Points % YTD%
EAGLE: EAGLE bids for HLCM PSEi 7,675.47 33.70 0.44 2.81

Economy: Government debt in January 2019 rises 2.8% m/m All Shares 4,748.97 19.04 0.40 5.12
Financials 1,701.73 18.34 1.09 -4.39
Holding Firms 7,717.84 24.87 0.32 5.12
Market Summary: Industrial 11,364.79 26.78 0.24 3.78
Mining & Oil 8,149.42 -210.31 -2.52 -0.62
The local equities market snapped its three-day losing streak, tracking the strong regional Property 3,939.71 13.72 0.35 8.59
Services 1,518.69 0.27 0.02 5.27
market, following reports that the US and China are close to reaching a trade agreement.
Dow Jones 25,819.65 -206.67 -0.79 10.68
The PSEi rose by 33.70 points or 0.44% to close at 7,675.47. This was driven by gains of index S&P 500 2,792.81 -10.88 -0.39 11.41
heavyweights such as SMPH (+1.45%), BDO (+1.54%), MBT (+1.73%), BPI (+1.37%), and AC Nasdaq 7,577.57 -17.79 -0.23 14.20

(+0.75%). However, these were partially offset by decliners such as ALI (-0.69%), SCC (-6.44%),
SECB (-1.42%), GLO (-1.73%), and BLOOM (-1.59%). SCC’s share price declined after reporting INDEX GAINERS
Php12.02Bil net profit, down 15.45% y/y. This missed our forecast largely due to higher than Ticker Company Price %
FGEN First Gen Corporation 22.00 3.29
expected costs from the coal mining business and Calaca unit 1 and 2.
MEG Megaworld Corporation 5.29 2.72
MBT Metrobank 76.50 1.73
On the other hand, HLCM (+4.57%) rallied after Ramon Ang said that EAGLE submitted a bid for GTCAP GT Capital Hldgs Inc 945.00 1.61
the cement firm. BDO BDO Unibank Inc 125.60 1.54

Value turnover declined to Php6.2Bil from Php8.5Bil in the previous session. Meanwhile, INDEX LOSERS
foreigners turned net buyers, accumulating Php81Mil worth of shares. This brought the year-to- Ticker Company Price %
date net foreign buying to Php26.4Bil. SCC Semirara Mining 20.35 -6.44
GLO Globe Telecom Inc 1870.00 -1.73
BLOOM Bloomberry Resorts 11.14 -1.59
SECB Security Bank Corp 160.20 -1.42
RRHI Robinsons Retail Hldgs Inc 85.30 -1.39

TOP 5 MOST ACTIVE STOCKS

Ticker Company Turnover
ICT Kint'l Container Term 346,381,600
ALI Ayala Land Inc 310,713,900
SMPH SM Prime Hldgs Inc 286,192,200
JGS JG Summit Hldgs Inc 280,642,500
BDO BDO Unibank Inc 275,076,800

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

TUE 05 MAR 2019

Top Stories:

GEORGE CHING MPI: NLEX targets Php16Bil in 2019

SENIOR RESEARCH MANAGER

METRO PACIFIC INVESTMENTS CORP. NLEX targets Php16Bil in 2019. MPI said it expects North Luzon Expressway’s (NLEX)
BUY revenues to increase to Php16Bil in 2019. The company said that the target revenue assumes
PHP8.01 toll rate hike assumption, traffic growth and the opening of the NLEX Harbor Link.

This is in line with our assumption that NLEX will be granted a toll increase this year linked to
the opening of NLEX Harbor Link Segment 10. We expected toll hike increases for inflation
adjustment that have been put on hold since 2012 to be implemented in tranches beginning
2020.

Maintain BUY rating on MPI. We are maintaining our BUY rating on MPI with a FV
estimate of Php8.01/sh. MPI’s share price has declined by 20.2% during the past 12 months,
underperforming the PSEi which has declined by only 8.5% during the same period. We believe
that the underperformance was mainly due to regulatory concerns surrounding its water and
toll roads businesses. However, we believe that these concerns are overblown. Maynilad has
already won its second arbitration case against the government. Meanwhile, although MPTC
is still in arbitration against the government, it is currently in talks with the government for
the tariff adjustment of its toll road business. Moreover, valuations are already very attractive.
Based on MPI’s current market price of Php4.57/sh, the company is trading at a 50% discount to
its NAV. The toll road business and Maynilad are nearly worthless as investors are only paying
for MPI’s 45.5% stake in Meralco (representing 100% of MPI’s market value). MPI is now trading
at only 10X 2019E P/E, a discount relative to the 14.6X average P/E of its industry peers. Based
on its current market price, upside to our FV estimate of Php8/sh is significant at 75.2%.

RICHARD LAÑEDA, CFA BLOOM: FY18 profit grows 18% on higher GGR
SENIOR RESEARCH MANAGER

BLOOMBERRY RESORTS
BLOOM’s FY18 reported net profit grew 18.2% y/y to Php7.17 Bil. This was driven by a 16%
BUY growth in net revenues and 21% improvement in EBITDA. The reported income of Php7.17 Bil
PHP13.74 is ahead of both COL and consensus estimate, however this may include FX gains. On the other
hand, EBITDA is in line with estimates.

Exhibit 1. Results Summary

Source: BLOOM, COL estimates, Bloomberg

COL Financial Group, Inc. 2

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 05 MAR 2019

4Q19 EBITDA recover from poor 4Q18 hold rate. BLOOM’s consolidated EBITDA for 4Q18
grew 62% y/y to Php3.43 Bil as Solaire’s VIP segment recovered from a very low hold rate of
1.94% in 4Q17. In 4Q18, VIP GGR of Solaire grew 53% while mass tables and EGM GGR grew
18% and 10% respectively.

Exhibit 2. Solaire GGR breakdown

Source: BLOOM, COL estimates, Bloomberg

Maintain BUY and FV estimate of Php13.74. Headline numbers of BLOOM look strong but
we get more details when financial statements come out and when the company does their
briefing. We maintain our BUY rating on BLOOM with a fair value estimate of Php13.74. We
continue to have a positive outlook on the company as it is a main beneficiary of the growing
gaming sector in the Philippines.

Other News:

RESEARCH ANALYSTS EAGLE: EAGLE bids for HLCM

ANDY DELA CRUZ
JOHN MARTIN LUCIANO EAGLE Chairman Ramon Ang said that they have submitted a bid for HLCM. Recall that
FRANCES ROLFA NICOLAS
LafargeHolcim, HLCM’s parent, is looking to sell its Philippine subsidiary as part of a broader
JUSTIN RICHMOND CHENG
strategic review of the company’s Southeast Asia operations according to news.
ADRIAN ALEXANDER YU
(source: Philstar, Bloomberg)

Economy: Government debt in January 2019 rises 2.8% m/m

The national government debt stood at Php7.5Tril in January 2019, up 2.8% from December
levels. Bulk of the loans are from domestic sources at Php4.9Tril. This figure also grew 2.8%
driven by the net issuance of government securities in January at Php133Bil. Note that
the issuance was partly tempered by the downward valuation of domestic dollar bonds at
Php200Mil following the strengthening of the peso. Meanwhile, funds raised from foreign
sources stood at Php2.6Tril with the rise in debt mainly coming from higher foreign loan
availments worth Php83Bil. (source: BusinessWorld)

COL Financial Group, Inc. 3

 CALENDAR OF EVENTS DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 05 MAR 2019 MARCH

SUN MON TUE WED THU FRI SAT

1 1 1 2 3 1 2

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

31 31 6 7 8 9 10

K E Y E V ENTS HOL IDAY

MA RC H 1 MA RC H 1 2 MA RC H 2 1
FEU: EX-DATE PH P8.00 C A S H DIV IDEND A NS : EX-DAT E PH P0 . 2 5 C A S H D I V I D E N D C L I : E X-DAT E PH P0 . 2 0 C A S H D IVID END

MA RC H 5 MA RC H 1 4 MA RC H 2 2
PLC: EX-DATE PH P0.050 24 C A S H DIV IDEND P R C : EX- DAT E PH P0 . 0 8 C A S H D I V I D E N D I S : A N N UA L SH A R E H O L D ER S MEE TING

MA RC H 7
B DO: EX-DATE PH P0.30 C A S H D IV IDEND
MA RC H 8
ALI : EX-DATE PH P0.26 C A S H DIV IDEND
NOW: ANNUAL SH ARE HO LDER S M EE T ING
MA RC H 1 5 MA RC H 2 9
C LC : A N N UA L SH A R E H O L D E R S M E E T I N G CO L : A N N UA L S H A R E H O LD ER S MEE TING
P NX: A N N UA L SH A R E H O L D E R S M E E T I N G
MA RC H 1 9
M ER : EX- DAT E PH P1 0 . 5 9 C A S H D I V I D E N D

MA RC H 11
MWC: EX-DATE PH P0.45 51 C A S H DIV IDEND
B EL: EX-DATE PH P0.12 C A S H DIV IDEND
UR C: EX-DATE PH P1.50 C A S H D IV IDEND
AB S: EX-DATE PH P0.55 C A S H DIV IDEND

COL Financial Group, Inc. 4

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 05 MAR 2019

IMPORTANT RATING 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.

IMPORTANT DISCLAIMER
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.

COL RESEARCH TEAM

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

ANDY DELA CRUZ JOHN MARTIN LUCIANO FRANCES ROLFA NICOLAS

SENIOR RESEARCH ANALYST SENIOR RESEARCH ANALYST RESEARCH ANALYST
andy.delacruz@colfinancial.com john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com

JUSTIN RICHMOND CHENG ADRIAN ALEXANDER YU

RESEARCH ANALYST RESEARCH ANALYST
justin.cheng@colfinancial.com adrian.yu@colfinancial.com

COL FINANCIAL GROUP, INC.

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