{"id":322563,"date":"2023-04-05T01:42:23","date_gmt":"2023-04-04T17:42:23","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=322563"},"modified":"2023-04-05T01:42:24","modified_gmt":"2023-04-04T17:42:24","slug":"stock-in-focus-wilcon-depot-wlcon-5-apr-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-wilcon-depot-wlcon-5-apr-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Wilcon Depot (WLCON) – 5 Apr 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>WLCON<\/td><\/tr>
Company Name<\/strong><\/td>Wilcon Depot Inc.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Apr 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 33.80<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We cut our target price (TP) for WLCON from Php36.00 to Php33.80 based on our adjusted 2023 EPS forecast of Php1.13, to which we applied the average of the stock\u2019s 2019 Price-Earnings (P\/E) ratio of 33.8x and our 2023 forecasted P\/E of 25.9x. Our revised target price still implies a compelling upside of 15.4%. Including estimated 2023 dividend yield of 1.3%, the total potential return is 16.7% Hence, we maintain our BUY recommendation.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

Topline supported by strong SSSG and strong additions<\/strong><\/p>\n\n\n\n

Revenues in 4Q 2022 were sustained and climbed 18% year-on-year (yoy) due to strong\u00a0same-store sales growth (SSSG) of 10.2% on account of a strong recovery in Metro Manila stores. Sales were further strengthened by new store additions, with 9 out of the 10 store additions commencing operations outside of Metro Manila, and successfully captured new markets (new home depots contributed to 36% of the format\u2019s net sales growth).<\/p>\n\n\n\n

Sales growth expected at mid-teens this year<\/strong><\/p>\n\n\n\n

We believe WLCON can achieve mid-teens sales growth this year, largely driven by new store additions. The 8-10 planned new store additions that will be located mainly in Luzon, wherein a Php3.8 billion capex is earmarked for, will bring its store network portfolio to 91-93 by end-2023. Growth will also stem from margin expansion coming from the target increase in contribution of the in-house and branded products to 52%.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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