Papa Securities Corp. (Morning Huddle - Daily News) - August 10, 2017

August 10, 2017   Morning Huddle Daily Summary

 

US Tracker US stocks closed lower after Trump threatens N.Korea. DOW 22,048.70 -36.64 -0.17% EPHE 36.09 -0.35 -0.96% PHI 32.39 -0.58 -1.76% Peso 50.575 TEL Par 1,638 vs 1,635 TEL   Corporate News PF 1H17 net income +24% YoY to PhP3.1bn, in-line with our estimate of PhP6.44bn (48.1%), and ahead of consensus’ (57.9%). In 2Q17 alone, net income up 27.6% YoY to PhP1.6bn. Strong profit performance was mainly attributed to its Branded Value-Added businesses (+4% YoY), improved operational efficiencies, and lower raw material costs. Meanwhile, revenues grew 5% YoY to PhP56.0bn. However, milling business declined 2% to PhP4.6bn due to soft global wheat prices and intense competition. Last 311.0   1H17 segment sales performance Segment % ch YoY in PhPbn Branded Value-Added 4% 12.6 Better sales mix, increased volumes from the processed meats segments Agro-industrial (Feeds, Poultry, and Monterey) 6% 39.5 Higher volumes and favorable selling prices Milling -2% 4.6 Soft global wheat prices and intense competition   MRSGI 1H17 net income up 53.1% YoY to PhP401.1mn, ahead of consensus full-year forecast of PhP961.50mn (41.7%). In 2Q17 alone, profit up 45.9% YoY to PhP305.2mn. Revenues were slightly up 1.9% to PhP8.6bn in 2Q17. This is a result of the opening of a new store during the 2H16 and additional two new stores during 1H17. Excluding the impact of newly opened stores, SSSG was 1% 1H17 vs 1H16’s 5%. Comment: Note that 1H results historically account for ~30% of MRSGI’s full-year performance thus we reckon 1H17’s performance was ahead of consensus FY forecast. As of end-June, MRSGI operated a total of 52 stores. Earnings Summary           PhP in mn 2Q16 2Q17 YoY 1H16 1H17 YoY Revenue      8,461.0      8,620.7 1.9%   16,131.88   16,651.1 3.2% Gross Profit      1,839.0      2,007.3 9.1%     3,400.80      3,710.4 9.1% Net Income         209.2         305.2 45.9%         262.03         401.1 53.1% GPM 21.7% 23.3% 160bps 21.1% 22.3% 120bps NIM 2.5% 3.5% 100bps 1.6% 2.4% 80bps Source: MRSGI               EMP net income -20.6% YoY to PhP2.7bn amid softer domestic liquor consumption. This is below FY2017 consensus’ estimate of PhP7.49bn (36%). 1H17 revenues were also down 1.6% to PhP1.1bn. No further details were disclosed. Last 7.07   BLOOM 1H17 surged 24x YoY to PhP4.1bn, beating consensus at 109% of PhP3.8bn. In 2Q17 alone, net earnings grew 47% to PhP1.96bn. EBITDA rose 28% to PhP6.8bn. Strong earnings was mainly due to better Solaire operations and lower losses from Korea. . All segments reported strong volume: VIP (+25.0%), mass table (+22.0%), and gaming machines (+28.0%). Gross gaming revenues went up 26% to PhP22.9bn. Non-gaming revenues grew 40% to P1.6 bn driven by new shows in the Theatre at Solaire, the opening of The Shoppes at Solaire, and improved hotel occupancy of 91.6% from 84.2% in 1H16. Last 9.05.     MWC posts Php3.2bn (+3.0% YoY) in 1H17, in-line with consensus full-year estimate of Php6.0bn (53.0%). The 3.0% increase in consolidated billed volume (366.9mn cubic meters), with billed volume in the Manila concession area growing by 1.0%, while billed volume in local non-Manila concession areas grew by 10.0%. Last 31.35.   SCC 2Q17 profit flat at PhP3.4bn. 1H17 earnings were booked at PhP7.9bn (+23.5% YoY), in line with both PAPA (48%) and consensus (50%) estimates. The power segment recorded better capacity factor during the first half (blended rate of 56% vs 50% last year), leading to a 12% increase in generation, but only 1.2% increase in energy sold. Meanwhile, coal sales volume dropped 4.2% despite higher production (+25%) due to timing difference of export deliveries. We currently have a NEUTRAL rating on SCC with TP at 180/sh. Last 165.80.     CEB posts Php4.3bn (-43.6% YoY) in 1H17, in-line with consensus full-year estimate of Php8.7bn. Higher aviation fuel expense (+29.5% YoY), Php1.1bn hedging losses, and higher FX losses (+185.0% YoY) primarily drove the lower net income in the 1H17. Last 100.70.