THU 19 AUG 2021

Top Stories:

PSE: Increased market activity boosts 1H21 profits (AS OF AUG 18, 2020)
MWIDE: Books net loss despite recovery in construction segment INDICES

Close Points % YTD%

PSEi 6,680.18 118.77 1.81 -6.44

Other News: All Shares 4,118.41 45.94 1.13 -3.61

Financials 1,445.34 14.90 1.04 -0.16
Holding Firms 6,651.15 174.19 2.69 -9.57
EMP: EMP to make its debut in Singapore exchange Industrial 9,641.08 57.20 0.60 2.64
DITO: DITO secures pre-clearance for share-swap deal Mining & Oil 9,375.25 -129.06 -1.36 -1.60
Property 3,141.06 80.78 2.64 -14.28
ALLDY: AllDay Marts set to go public with a Php60Bil IPO
1,639.24 10.44 0.64 8.27
Economy: Vehicle sales up 4.7% in July
Economy: Philippines cuts GDP growth outlook amid stricter lockdown Dow Jones 35,343.76 0.00 15.48

measures S&P 500 4,447.16 -0.92 -0.02 18.40

Nasdaq 14,674.19 18.01 0.12

COVID-19 Update: INDEX GAINERS

Ticker Company Price %
Total Cases Total Deaths Total Recoveries EMP Emperador Inc 16.00 12.83
BLOOM Bloomberry Resorts 5.80 5.65
Philippines 1,776,495 (+11,085) 30,623 (+161) 1,640,721 (+11,628) SM SM Investments Corp 1000.00 4.17
DMC DMCI Hldgs Inc 6.26 3.81
USA 38,067,107 (+181,819) 641,312 (+1,239) 30,340,545 (+51,264)
ALI Ayala Land Inc 34.05 3.65
Worldwide 210,044,624 (+719,452) 4,403,923 (+10,511) 188,175,060 (+552,085)
INDEX LOSERS
Ticker Company Price %
MER Manila Electric Co 285.00 -2.40
Market Summary: RLC Robinsons Land Corp 16.30 -1.81
FGEN First Gen Corp 27.80 -0.71
The local equities market sustained its rally on Wednesday ahead of the potential lifting GTCAP GT Capital Hldgs Inc 529.00 -0.19
MEG Megaworld Corp 2.81 0.00
of the strict quarantine and as earnings of most companies recovered in the second
quarter.
TOP 5 MOST ACTIVE STOCKS
The PSEi gained by 118.77 points or 1.81% to close at 6,680.18. The top movers were Ticker Company Turnover
BPI Bank of the Phil Islands 552,653,800
BLOOM (+5.65%), SM (+4.17%), ALI (+3.65%), JGS (+2.88%), and SMPH (+2.80%). On
EMP Emperador Inc 459,197,600
the other hand, the main drags were MER (-2.40%), RLC (-1.81%), FGEN (-0.71%), CNVRG GLO Globe Telecom Inc 323,518,500
(-0.37%), and GTCAP (-0.19%). BDO BDO Unibank Inc 267,590,000
ICT Intl Container Term 252,665,100

Value turnover inched declined to Php6.2Bil from the Php6.8Bil traded on Tuesday.
Meanwhile, foreigners turned net buyers, accumulating Php90.5Mil worth of shares vs
the Php534.4Mil in net outflows seen in the previous trading day.

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 19 AUG 2021

Top Stories:

John Martin Luciano, CFA PSE: Increased market activity boosts 1H21 profits
Senior Research Analyst

The Philippine Stock Exchange Increased market activity boosts 1H21 profits. The Philippine Stock Exchange reported
N/A Php228Mil in net income during the second quarter, up 25% y/y. This brought first half
N/A earnings higher by 63% y/y to Php378Mil. Operating revenues in 1H21 rose 31% y/y,
driven by higher revenues from listing related income, trading-related fees, and service
fees. On the other hand, operating expenses grew at a slower pace of 17.5% y/y which
led to the significant improvement in the PSE’s bottom-line.

Exhibit 1: Results Summary

source: PSE

Several capital raising activities and higher trading volume drive revenues. Listing
related income during the first half rose 48% y/y to Php325Mil. This was due to the robust
capital raising activities that occurred during the first half: IPO of MONDE (Php55.9Bil)
and DDMP REIT (Php14.7Bil), SRO of ACEN (Php5.4Bil) and CEB (Php12.5Bil), and FOO
of ACEN (Php13.1Bil) and HOUSE (Php3.7Bil). Total capital raised in 1H21 reached
Php122.5Bil. This already exceeded the amount of capital raised in 2019 and 2020.

Meanwhile, trading-related fees and service fees increased 18% y/y and 38% y/y to
Php192Mil and Php195Mil, respectively. This was driven by the 36% y/y improvement in
the average daily value turnover to Php9.0Bil from Php6.6Bil during the same period last
year. Trading activity remained robust despite the continued net foreign outflows which
reached Php87.0Bil for the January to July period. Meanwhile, retail investors increased
their participation in the market to 37.3% from 22.5% last year. The strong growth in all
its major components led to a 31% increase in PSE’s operating revenues to Php741Mil.

Exhibit 2: Revenue Breakdown

source: PSE

COL Financial Group, Inc. 2


THU 19 AUG 2021
Adrian Alexander Yu
Senior Research Analyst
Kerwin Malcolm Chan
Research Analyst
Megawide Construction Corp.
N/A
N/A
COL Financial Group, Inc.
DAILY NOTES I PHILIPPINE EQUITY RESEARCH
Key initiatives for 2H21. The exchange remains hopeful that regulators will approve
short selling in 3Q21. Meanwhile, it’s developing a mid-cap and high-dividend index. it is
also launching a data analytics platform that it hopes will empower investors to analyze
data on their own. It is also planning to expand its PSE easy platform to integrate an
online payment system for IPO subscription. It also wants to expand this to other forms
of public offerings like SRO and FOO.
MWIDE: Books net loss despite recovery in
construction segment
2Q21 net loss reaches Php96Mil, a reversal from Php3Mil net income in 1Q21.
MWIDE booked a net loss of Php96Mil in 2Q21, an improvement from the Php599Mil
net loss in 2Q20 when construction activities and airport operations were hard hit at the
height of the pandemic. However, its bottom-line performance was worse compared to
the Php3Mil net income booked in 1Q21. This was mainly attributable to the one-off tax
gain that MWIDE recorded in 1Q21 from the retroactive effect of the CREATE law and
higher taxes booked during 2Q21. For 1H21, net loss amounted to Php93Mil, below
consensus’ full year net income estimate of Php555.5Mil.
Despite the q/q decline in net income, 2Q21 revenues increased by 159.5% y/y and 3.0%
q/q to Php3.8Bil on the back of higher construction revenues. Management noted that
construction activities remained resilient despite the stricter lockdown measures. This
brought 1H21 revenues up by 17.9% y/y to Php7.6Bil. Despite the improvement, 1H21
revenues accounted for only 37.8% of consensus’ full year estimates. On the other hand,
1H21 gross profit margin was lower at 16.9% compared to 22.0% during the same period
last year mainly due to the 25% pre-pandemic margin booked in 1Q20.
Exhibit 1: Results Summary
source: MWIDE, Bloomberg
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THU 19 AUG 2021

Construction activities continue upward trajectory. MWIDE’s 2Q21 revenues increased

by 227.4% y/y and 3.4% q/q to Php3.5Bil despite the shift to the more restrictive ECQ
and MECQ during the first half of the quarter. Note that under the government’s ECQ
guidelines, all essential public and private construction projects are allowed to operate at
full capacity with special health protocols that need to be followed. During the lockdown,
MWIDE continued construction operations while providing barracks for its workers to
maximize efficiency and minimize workers’ potential exposure to the virus from outsiders.
As a result, 1H21 construction revenues reached Php6.9Bil, higher by 43.2% y/y. Moving
forward, management expects construction revenues to maintain its upward growth as
construction activities are allowed under any form of lockdown restrictions.

Exhibit 2: Revenue results

source: MWIDE

Airport segment still weak. However, the 2Q21 performance of MWIDE’s airport
segment remained weak, with revenues growing by only 4.5% q/q to Php119Mil from
Php114Mil in 1Q21. According to management, passenger traffic in the Mactan-Cebu
International Airport (MCIA) gained traction primarily due to the rise in domestic tourism.
However, domestic and international passenger volume was still down by 76% and 93%
y/y, respectively, as positive COVID-19 cases continue to rise worldwide. The standstill
in global tourism brought 1H21 airport revenues down by 73.6% y/y to Php233Mil
from Php882Mil in 1H20. Nevertheless, management is expecting modest growth in its
domestic passenger volume as the government further loosens lockdown restrictions
and as LGUs ease travel guidelines.

PITX revenues down q/q on rent concessions. 2Q21 landport revenues fell by 7.5% q/q
to Php173Mil from Php187Mil in 1Q21 due to the rent concessions that MWIDE granted
to its office tenants to support their business operations. Moreover, average daily foot
traffic fell to 26,000 in April from 45,000-50,000 in 1Q21, due to the reimposition of ECQ
in Metro Manila and other neighboring provinces. Meanwhile, 1H21 landport revenues
amounted to Php360Mil, lower by 39.9% y/y, as one of its towers were vacated last
year. Note that majority of landport revenues comes from its office leases. As such, PITX
revenues will most likely remain at current levels until management finds new tenants
that will lease its vacant tower.

Valuations. Consensus currently has a BUY rating on MWIDE with a FV estimate of

Php7.51/sh. We will release a more detailed report following the release of MWIDE’s
quarterly report.

COL Financial Group, Inc. 4

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 19 AUG 2021

Other News:

Research Analysts
EMP: EMP to make its debut in Singapore exchange
John Martin Luciano, CFA
EMP is looking to make its debut on the main board of the Singapore Exchange (SGX)
Frances Rolfa Nicolas
through a listing by way of introduction. Management sees SGX as the appropriate
Justin Richmond Cheng
Adrian Alexander Yu exchange that will help raise the international profile of EMP and bring more awareness
Kerwin Malcolm Chan to EMP and its world class brands. This in turn should increase the stock’s visibility and
international investor participation. (Source: EMP)

DITO: DITO secures pre-clearance for share-swap deal

DITO announced that it has obtained pre-clearance for its share-swap application from
the SEC – Financial Analysis and Audit Division. DITO has also already paid the necessary
filing fees necessary for the share-swap. Under the agreement., DITO will acquire 100%
of the shares of Udenna Communications Media and Entertainment Holdings Corp
(Udenna CME). In return, DITO will issue 11.2 billion of DITO common shares to Udenna
CME. Udenna CME owns Udenna Corp.’s shares in its telecommunications business.
Following the successful share swap, Udenna CME will own 80% of DITO’s new listed and
outstanding shares of 15 billion. (Source:Bworldonline)

ALLDY: AllDay Marts set to go public with a Php60Bil IPO

Villar Group’s AllDay Marts, Inc. has registered with SEC for its IPO worth Php60Bil. AllDay
Marts (ALLDY) currently operates 33 stores in 25 cities nationwide. The company plans to
offer a maximum of 6,857,143,000 common shares to the public at an indicative price of
Php0.80/sh with an overallotment option of up to 685,714,000 shares.

PNB Capital and Investment Corp. will act as the sole issue manager, while BDO Capital
& Investment Corp. and China Bank Capital Corp. are assigned as joint lead underwriters
and joint book runners.

Proceeds from the IPO will be used primarily: to repay their Php4.1Bil debt and to fund
capex to increase store network to 100 stores by 2026 year-end. (Source: BusinessWorld)

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 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 19 AUG 2021

Economy: Vehicle sales up 4.7% in July

Data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and
Truck Manufacturers Association (TMA) showed that auto sales of member companies
increased by 4.7% to 21,499 in July, from 20,542 units sold in the same month last year.
CAMPI President Rommel Gutierrez said that the industry welcomed the y/y growth
but anticipates a decline in sales this month with the re-imposition of the enhanced
community quarantine (ECQ) in NCR and other areas. This brought the sales for the
first seven months of the year to 154,265 units, up 46.1% y/y. Broken down, commercial
vehicle sales increased by 38.7% to 104,757 units, while passenger vehicle sales grew by
64.6% to 49,508 units. In July, Toyota Motor Philippines took the biggest market share
with 50%, followed by Mitsubishi Motors Philippines Corp. with 12.31%, and Suzuki
Philippines, Inc. with 7.67%. (source: Businessworld)

Economy: Philippines cuts GDP growth outlook amid stricter

lockdown measures

The government downgraded its economic growth target to 4-5% for this year from the
already downgraded 6-7% forecast, reflecting the impact of stricter lockdown measures
aimed at curbing a Delta-driven surge in COVID-19 infections. Note that the government
already trimmed the original 6.5-7.5% growth goal for this year to 6-7% in May. The
economy now has to grow by at least 4.3% in the second half to reach the low-end of
the revised target for this year, and by 6.3% to achieve a 5% full-year growth. Meanwhile,
the DBCC kept its 7-9% growth target for 2022 on expectations of a faster vaccine rollout
and further easing of quarantine measures. It also left its 6-7% projected expansion for
2023-2024 unchanged. (Source: Businessworld)

COL Financial Group, Inc. 6

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

THU 19 AUG 2021

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

CHIEF EQUITY STRATEGIST
april.tan@colfinancial.com

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA

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, CFA
SENIOR RESEARCH ANALYST RESEARCH ANALYST SENIOR RESEARCH ANALYST
john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com justin.cheng@colfinancial.com

ADRIAN ALEXANDER YU KERWIN MALCOLM CHAN

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

C OL F INANC IAL G R O UP, IN C.

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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. 8