{"id":320305,"date":"2023-01-06T13:06:31","date_gmt":"2023-01-06T05:06:31","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=320305"},"modified":"2023-01-06T13:14:29","modified_gmt":"2023-01-06T05:14:29","slug":"ubp-sro-jan-2023","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/ubp-sro-jan-2023\/","title":{"rendered":"UBP stock rights offer (SRO) could yield mere 1.2% upside to current prices"},"content":{"rendered":"\n<p>Unionbank of the Philippines (UBP) set its final price for its stock rights offer (SRO) at P56.88\/share, a 36% discount to its last traded price (LTP) of P89.80\/share. The entitlement ratio is set at 1 stock rights for every 10.15 common shares. <\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Analysis and Recommendation<\/h2>\n\n\n\n<p>Assuming the P89.80 LTP is the investor\u2019s average cost prior to the SRO\u2019s ex-date, if he\/she participated in the SRO, it would effectively reduce its average cost by 3.29% to P86.94\/share. <\/p>\n\n\n\n<p>At this level, however, the potential upside to the current consensus target price for UBP at P88.00\/share is still limited to just 1.2%. Therefore, for those investors who are looking to position in UBP or add more ahead of the SRO ex-date (Jan. 9), our advice is to just wait for the potential correction post ex-date. <\/p>\n\n\n\n<p>We note that based on UBP\u2019s SRO last April 2022, share price plummeted by 26% to offer period\u2019s low of P72.50 (over 11% above April SRO price) post-ex-date.<\/p>\n\n\n\n<p>Meanwhile, for those with existing position, it would be prudent to just participate in the SRO given the 36% discount. Going forward, this SRO is likely to boost further the stock\u2019s liquidity in the market and therefore improve its chances of being included in the PSEi which should stir some optimism for UBP. <\/p>\n\n\n\n<p>In terms of the impact on valuation, the potential dilution stemming from this SRO is likely to be offset by a higher projected earnings growth as 75% of proceeds will be used to expand loan portfolio (retail and corporate), the remaining would be capital infusion to UnionDigital.<\/p>\n\n\n\n<div style=\"height:26px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p style=\"font-size:16px\"><em><em>This report is prepared by PinoyInvestor\u2019s partner broker below. Find out more about <a href=\"https:\/\/www.pinoyinvestor.com\/smartinvestor\/our-partner-brokers\/\">our partner brokers<\/a> and sign up to avail their complete trading brokerage services.<\/em><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Here\u2019s a commentary on an important issue or event affecting the stock market<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-320305","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/320305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=320305"}],"version-history":[{"count":1,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/320305\/revisions"}],"predecessor-version":[{"id":320307,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/320305\/revisions\/320307"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=320305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=320305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=320305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}