{"id":322506,"date":"2023-03-30T01:26:33","date_gmt":"2023-03-29T17:26:33","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=322506"},"modified":"2023-03-30T02:26:43","modified_gmt":"2023-03-29T18:26:43","slug":"stock-in-focus-phinma-corp-phn-30-mar-2023-by-ab-capital-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-phinma-corp-phn-30-mar-2023-by-ab-capital-securities\/","title":{"rendered":"Stock in Focus: PHINMA Corp. (PHN) – 30 Mar 2023 by AB Capital Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PHN<\/td><\/tr>
Company Name<\/strong><\/td>PHINMA Corp.<\/td><\/tr>
Broker<\/strong><\/td>AB Capital Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>30 Mar 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 1,080.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We maintain our BUY recommendation on Phinma Corp. (PHN) as its story remains compelling. The shift in PHN\u2019s earnings mix from construction materials to education underscores the group\u2019s transformation from a cyclical and highly unpredictable company to a more stable secular growth play.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

2022 full year profit in line with forecasts<\/strong><\/p>\n\n\n\n

PHN posted earnings of P754 million for the full-year 2022, in line with forecasts. Recall that in the 3rd quarter of 2022, we revised our forecasts downward as we expected the Group\u2019s profits from the Construction Materials Group (CMG) and PHINMA Education (PEHI) to come under pressure in the last quarter. <\/p>\n\n\n\n

The Peso\u2019s notable depreciation in 2H22 nearly wiped-out profits in both of CMG\u2019s main businesses: the cement trading business, that relies heavily on importing more cheaply produced cement from its Vietnamese partner, and the steel business, that imports its main raw material \u2013 steel coils. <\/p>\n\n\n\n

CMG made just P28 million in 4Q22 alone and P495 million for the full year, down 45%. For PEHI, the start of SY2022-23\u2019s second semester was moved from December 2022 to January 2023 as the Commission on Higher Education (CHED) continued to catch up on pandemic disruptions, resulting in the education business losing a month\u2019s revenue in the last quarter. This brought 4Q 2022\u2019s earnings to just P190 million (-17% YoY, -50% QoQ) and full year earnings to P633mn, down 24% YoY.<\/p>\n\n\n\n

School calendar disruptions stunt banner year for PEHI, while construction materials faced a tough business environment<\/strong><\/p>\n\n\n\n

Full year revenues clocked in at P17.7 Billion (+10%) in 2022 on the back of a 10% increase in revenues for PEHI and 9% increase for CMG. While PEHI saw enrollment top 124,501 students for SY22-23, a 32% increase from the previous school year, pandemic induced calendar disruptions resulted in calendar year 2022 only recognizing 8 months\u2019 worth of revenues as opposed to what is normally 10 months.<\/p>\n\n\n\n

Cement imports declined and 4Q prices reverted to 1Q levels, while competition in the steel industry intensified as local roll-formers continued to proliferate. Philcement Corporation\u2019s (Philcement) 2022 revenues increased by 15% in 2022 as price increases made up for the 2% volume growth. Union Galvasteel Corporation\u2019s (UGC) revenues, on the other hand, ended flat YoY as price increases offset a 6% volume decline.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>