Stock of the Week

16 August 2021

Robinsons Land Corporation What has changed?


RLC.PS RLC PM In our latest report, we adjusted our FY21F/22F EPS
estimates by +23%/-8% as we incorporated gains from the
JV land sales this year and moderated residential
Last Price construction ramp up next year. Our SOTP-based TP is
Rating Target Price Upside
13-Aug-2021 unchanged at PHP23.00 and we maintain our Buy rating as
Buy PHP15.94 PHP23.00 +44.0% the stock still trades at a wide 52% discount to NAV.
 RLC’s 2Q21/1H21 earnings increased 394% y-y/48% y-y to
Minimum Free Float Mkt Cap P/E PHP2.6bn/PHP5.5bn, largely due to the recognition of gains
Lot Size Level (%) (USD mn) FY21F from JV land parcel sales (~PHP2.7bn revenues) in 2Q21.
100 38.80% 1,642 8.7x For the 1H21 period: 1) local residential revenues were still
down 40% y-y to PHP4.7bn as quarantine restrictions
EPS Growth Div Yield P/B ROE continued to restrain construction activity, while the high-
FY21F FY21F FY21F FY21F base effect of the accounting change last year also affected
revenue recognition trends; 2) mall revenues dropped 16% y-
75.9% 3.1% 0.8x 9.0% y to PHP4.2bn as mall footfall remained weak at ~40% of
pre-pandemic levels; and 3) office leasing revenues were
About the Company resilient at PHP3.1bn (+3% y-y) as 36.5k sqm of new office
Robinsons Land Corp (RLC) serves as the real estate arm of listed space (+6% q-q) was added in 2Q21 and occupancies
conglomerate JG Summit Holdings (JGS). The Company’s improved further to 94% (vs 93%/91% in 1Q21/4Q20) on
operations is divided into five business divisions: the commercial new signups from BPOs. As of end-2Q21, BPOs continued
centers, residential, office buildings, hotels and resorts, and to account for a bulk of RLC’s occupied GLA at 85%, while
traditional HQ tenants and POGOs accounted for the
industrial and integrated developments. As of end-2020, RLC has
balance at 13% and 2%, respectively.
52 commercial centers, 119 residential buildings and subdivisions,
25 office buildings, 5 flexible spaces, 20 hotels and resorts, 4  For the first half of the year, residential presales grew 19% y-
y to PHP5.5bn on improved take-up for its existing and new
industrial facilities, and 3 integrated developments distributed projects. Locals accounted for 92% of total presales, while
across 29 provinces in the Philippines. the remaining 8% was accounted for by foreign buyers.
Management notes that they are prepared for push-button
launches and hopes for a sustained revival in demand.

Absolute price performance (YTD):

RLC is down 25% YTD and has underperformed the PCOMP (-12%). We believe concerns over constrained construction
capacities in residentials and lingering weakness in mall revenues have largely been priced in by the market, while the
company’s strong financial position (PHP14bn in cash and a low net gearing of 0.39x) remains overlooked.

30% RLC price performance PCOMP price performance

20%

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Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21

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expressed or implied, is made as to its accuracy, completeness or correctness. BDO Securities, Inc. is the distributors of this report in the Philippines.
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