July 27, 2017
Morning Huddle
Daily Summary
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US Tracker
US stocks reach all time high on better than expected earnings and unsurprising remarks from the Fed.
DOW 21,711.01 +97.58 +0.45%
EPHE 36.96 +0.59 +1.62%
PHI 34.05 +0.14 +0.41%
Peso 50.64
TEL Par 1,724 vs 1,709 TEL Last
Economic News
Lower TDF demand as banks opt to lend more. Bids for the BSP’s term deposit facility reached just PhP141.2bn, below the PhP180bn offering as banks place money in lending activities and investments in government securities. Both the 7-day and 28-day deposits were undersubscribed with yields of 3.31% and 3.49%, respectively.
Corporate News
CHP 1H17 net income down 46% to PhP486mn. This is below our FY17 estimate of PhP2.36bn (20.6%) and below the consensus forecast of PhP2.6bn (18.7%). Revenue fell 14% to PhP11bn as volume fell 6% and price declined 8%. CHP attributes the decline in sales to delays in government project implementation and policy reversals by the administration. The company guides 3% volume growth this year. Last 7.04.
HLCM’s 1H17 net income fell 43% to PhP2.1bn. This is below our PhP6.2bn (33.4%) and the PhP6.8bn consensus forecast (30.9%) In 2Q17 alone, net income fell 46% to PhP1.2bn. Revenue decline worsened in 2Q17 by 21% from a 12% retreat in 1Q17. 1H17 revenue is now down 17% to PhP17.4bn. Net income margin also declined to 12% from 18% in 1H16. HLCM adds that 2mn ton/year in new capacity would be finished by 2019 and will be located in La Union and Davao. This would bring total capacity to 12mn tons/year.
Comment:
The decline in HLCM's earnings is consistent with our view that the influx of cheap imported cement would threaten its performance. We remain pessimistic on the company for the rest of the year, as it pursues debottlenecking and capacity expansion activities. Last 13.48.
RECENT REPORTS
Immaterial impact on MBT from possible full provisioning of fraudulent loans.
EAGLE continues to enjoy a home court advantage vs. imports
Robust project pipeline supported by strong balance sheet and asset tactical maneuvering
Speculation of interest from foreign banks shore up share price
KEY CALENDAR EVENTS
JULY 2017
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