WEALTH RESEARCH

A Product of Wealth Securities Inc

DAILY WEALTH TAKE TUESDAY 15 AUG 2017

VLL grows 1H17 earnings by 14%: Vista Land and Lifescapes Inc (VLL) announced in a briefing TAKING STOCK
yesterday that its 1H17 net income grew 14% YoY to P4.38b. This came on the back of the 17%
growth in revenues which in turn were driven by the 14% growth in real estate sales and 31% PSE Index (14 Aug 2017)
increase in rental income. Margins were relatively steady. Meanwhile, the company sustained a 12% 7,962.12 +33.69
growth in reservations sales throughout the semester and this should bode well for prospective real Value T/O - net (Pb) 5.112
estate sales. 52wk High 8,106.74
52wk Low 6,499.00
Our take: VLLs 1H17 results largely met our expectations up to the pre-tax earnings level Foreign Buying (Pb) 2.453
(which accounted for 49% of our full-year estimates). The net income number was slightly Foreign Selling (Pb) 2.187
better than expected but we note that this came on the back of low effective tax rate (~13%
vs. the 16.3% effective tax rate in full-year 2016). We are inclined to keep our numbers.
Ricardo Puig
FLI posts 7% hike in 1H17 earnings: In a briefing yesterday, Filinvest Land Inc (FLI) said it
registered 1H17 net earnings of P2.59b, up 7.2% YoY as the weakness in 2Q17 real estate sales
were offset by the strong growth in office rental income. Real estate sales fell 17% in 2Q17 after Index Movers
growing by 31% in 1Q17 thus bringing the 1H17 growth to just 8.2%. On the other hand, rental SMPH +10.66
income rose 25% in 1H17, as growth accelerated to 26% in 2Q17 from 24% in 1Q17 on account JFC +5.47
increased gross leasable area (+24% to 514k sqm in 1H17). In particular, office rental income grew GTCAP +4.27
41% YoY in 1H17 which made up for the flat growth in mall revenues as the tenants in the expanded ALI +4.02
wing of the companys Festival Mall have yet to ramp up operations. AEV +3.89

Our take: FLIs 1H17 net earnings accounted for 48% of our full-year earnings estimate. Index Gainers
This is at pace with previous trends. Going forward, we expect FLIs real estate sales to JFC 2.59%
SCC 2.53%
gather momentum owing to the acceleration in reservation sales (+10% in 2Q17, +8% in
GTCAP 1.92%
1H17) as FLI ramped up project launches. It is also slated to add another 113k sqm in retail SMPH 1.62%
space and 111k sqm in office space until yearend which should provide additional boost to SECB 1.59%
rental income. Ricardo Puig
MWIDEs 2Q17 net income after pref dividends down 1.7% YoY: In its quarterly report to the Index Losers
Exchange, Megawide Construction Corp (MWIDE) disclosed that its 2Q17 net income to equity FGEN -2.52%
shareholders after deducting preferred dividends reached P417m, down 1.7%. This came on the ICT -1.53%
back of a 13.8% increase in consolidated revenues to P4.7b. However, overall gross margins RLC -0.82%
declined to 25.5% vs 25.7% last year largely due to the 195bps YoY contraction in construction gross MPI -0.76%
margins to 16.9% which offset the 791bps rise in the gross margins of its airport business that came AP -0.63%
with the ramping up of operations and expanded trading operations. Construction revenues (+11%
World Indices
to P4.1b) accounted for 87% of MWIDEs consolidated revenues. S&P
2,465.84 +1.00%
500
Airport revenues grew 35.2% on a 14% rise in passenger traffic in 1H17 as domestic and
FTSE
international flights grew by 6% and 36%, respectively. Air traffic volume also increased by 17% 7,353.89 +0.60%
100
for domestic flights and 37% for international flights as new international flights are added. Nikkei
19,537.10 -0.98%
225
In all, 1H17 net income declined by 1.2% to P1.72b. The company also registered total
construction backlog of P33.7b as of end-2Q17 compared to P37.14b in end-1Q17 and P38.49b
in end-2016. Key Peso Cross Rates
USD-PHP 51.2270
Our take: The construction business continued to trail our expectations while the airport JPY 0.4673
operations topped our forecasts. Overall revenues accounted for 48% of our full-year EUR 60.4389
estimate (with the construction and airport revenues representing 46% and 57% of our full- CNY 7.6800
year forecasts). But the sustained profitable operations of the airport business brought the GBP 66.4476
1H17 net income slightly ahead of our expectations (53% of our full-year estimate). We note
however that MWIDE generated 61% of its 2016 earnings in 1H16. We will review our Key Commodities
numbers pending more details from the analysts briefing tomorrow. Jason Lee BRENT CRUDE OIL
(USD/bbl.) -1.37 50.73
EDCs profit growth eases on weaker 2Q17 results: In a one-page statement, Energy
Development Corp (EDC) announced it posted 1H17 recurring earnings of P5.2b, 11% higher than GOLD 100 OZ FUTR
the P4.7b posted the same period last year. Earnings were down 5% YoY in 2Q17, but were more (USD/t oz.) -7.16 1,282.15
than offset by the 24% rise in 1Q17 net profits. Sequentially, recurring earnings declined 40% to
P1.9b in 2Q17 from P3.25b in 1Q17. This is faster than the 22% drop posted the same period last
year as revenue growth was slower in 2Q17 than 1Q17. Inclusive of non-recurring items, EDCs ____________
consolidated net income stood at P4.6b, 6% lower YoY, due to primarily to forex losses on loans and
Sources: Bloomberg, Technistock
loss from the early redemption of a portion of the companys US$ denominated bonds.

Our take: Although earnings growth was strong in 1H17, up 11%, we expect profits to again
moderate and remain weak in 2H17 due to lower plant capacity as some of EDCs power
plants remain offline following the magnitude 6.5 earthquake that struck the island of Leyte
last July 6. We shall issue a more detailed report after this afternoons analysts briefing.
Laura Dy-Liacco
Headlines Abroad
Asian stocks futures signal a higher open after US markets closed positive with investors tension on North Korea subsides. The
Federal Open Market Committee will issue its July policy meeting minutes later. Euro area GDP is also expected later.

Company Results/Briefing Schedule/Stockholders meeting

Company Results Date
Cosco Capital Inc (COSCO) 2Q17 15-Aug-17
Puregold Price Club Inc (PGOLD) 2Q17 15-Aug-17
Energy Development Corp (EDC) 2Q17 15-Aug-17
Pilipinas Shell Petroleum Corp (SHLPH) 2Q17 15-Aug-17
Metro Retail Stores Group Inc (MRSGI) 2Q17 17-Aug-17
East West Banking Corp (EW) 2Q17 23-Aug-17
Source: Phil Stock Exchange

Dividend Update
Company Dividend/sh Ex-date Record date Payment date
House of Investments Inc (HI) 0.065 15-Aug-17 18-Aug-17 12-Sep-17
Globe Telecom Inc (GLO) 22.75 16-Aug-17 22-Aug-17 06-Aug-17
Manulife Financial Corp (MFC) C$0.205 16-Aug-17 22-Aug-17 19-Sep-17
F & J Prince Holdings Corp (FJP) 0.10 16-Aug-17 22-Aug-17 15-Sep-17
Phoenix Petroleum Phil Incpref3A(PNX3A) 1.8570 17-Aug-17 23-Aug-17 19-Sep-17
Phoenix Petroleum Phil Incpref3B(PNX3B) 2.0270 17-Aug-17 23-Aug-17 19-Sep-17
Arthaland Corp pref B(ALCPB) 1.76145 17-Aug-17 23-Aug-17 06-Sep-17
San Miguel Pure Foods Company Inc (PF) 1.50 18-Aug-17 24-Aug-17 07-Sep-17
San Miguel Pure Foods Co Inc-pref2 (PFP2) 14.14225 18-Aug-17 24-Aug-17 12-Sep-17
Phoenix Petroleum Phil Inc pref (PNXP) 2.0625 18-Aug-17 24-Aug-17 20-Sep-17
Makati Finance Corp (MFIN) 0.03210621323 18-Aug-17 24-Aug-17 19-Sep-17
Makati Finance Corp (MFIN) 3.2106210323%18-Aug-17 24-Aug-17 19-Sep-17
Semirara Mining and Power Corp (SCC) 5.00 22-Aug-17 25-Aug-17 08-Sep-17
PLDT Inc (TEL) 48.00 22-Aug-17 25-Aug-17 08-Sep-17
Del Monte Pacific Limited (DMPL) US$0.0061 23-Aug-17 28-Aug-17 08-Sep-17
Manila Electric Company (MER) 8.925 24-Aug-17 30-Aug-17 22-Sep-17
Sun Life Financial Inc (SLF) C$0.435 24-Aug-17 30-Aug-17 29-Sep-17
Solid Group Inc (SGI) 0.07 25-Aug-17 31-Aug-17 25-Sep-17
Metro Pacific Investments Corp (MPI) 0.0345 29-Aug-17 01-Sep-17 26-Sep-17
F & J Prince Holdings Corp (FJP) 0.10 18-Sep-17 21-Sep-17 17-Oct-17
Leisure & Resorts World Corp (LR) 0.08 26-Sep-17 29-Sep-17 24-Oct-17
Petron Corp pref2A (PRF2A) 15.75 11-Oct-17 16-Oct-17 03-Nov-17
Petron Corp pref2B (PRF2B) 17.14575 11-Oct-17 16-Oct-17 03-Nov-17
Petron Corp pref2A (PRF2A) 15.75 11-Jan-18 16-Jan-18 05-Feb-17
Petron Corp pref2B (PRF2B) 17.14575 11-Jan-18 16-Jan-18 05-Feb-17
Source: Phil Stock Exchange

Wealth Securities Research

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Wealth Research Analysts

Rating System
Ricardo P. Puig
Research Head Wealth Securities Research follows the following
Strategy, Conglomerates, Property, rating definition
Telecommunications Buy We expect total return of more than 12% in
rpuig@wealthsec.com the next 12 months
Tel: (+632) 634-5038 ext 8128
Hold We expect total return of -12% to 12% in the
Laura Dy-Liacco next 12 months
Deputy Head of Research Sell We expect total return of less than -12% in
Utilities, Conglomerates the next 12 months
ldyliacco@wealthsec.com
Tel: (+632) 634-5038 ext 8153

ND Fernandez
Wealth Securities Inc
Banking
2103 A&B, East Tower, PSE Center
nd.fernandez@wealthsec.com
Exchange Road, Ortigas Center
Tel: (+632) 634-5038 ext 8158
Pasig City 1600
Tel: (+632) 634-5038
Matthew Sy-Tan
Fax: (+632) 634 5043
Consumer, Services, Mining
matthew.sytan@wealthsec.com
www.wealthsec.com
Tel: (+632) 634-5038 ext 8168

Jason Lee
Gaming, Construction, Media
jason.lee@wealthsec.com
Tel: (+632) 634-5038 ext 8165

Wealth Securities Research