{"id":322569,"date":"2023-04-05T01:51:33","date_gmt":"2023-04-04T17:51:33","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=322569"},"modified":"2023-04-05T01:51:35","modified_gmt":"2023-04-04T17:51:35","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-5-apr-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-5-apr-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 5 Apr 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>RRHI<\/td><\/tr>
Company Name<\/strong><\/td>Robinsons Retail Holdings 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 73.60<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We have a target price for RRHI of Php73.60 based on our forecasted 12-month forward Earning per Share (EPS) of Php4.10, to which we applied the stock\u2019s 2018 Price-Earnings (P\/E) ratio of 22.5x and our forecasted 12-month forward PE of 13.4x. At this target price, the implied share upside is 34.2%, including a 2023 estimated dividend yield of 2.4%, and a composite return of 36.6%.<\/p>\n\n\n\n

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

Core net income jumped 39.1% to Php5.3 billion<\/strong><\/p>\n\n\n\n

Robinsons Retail Holdings, Inc. (RRHI) reported F022 core net income of Php5.3 billion, 39% higher year-on-year (yoy), 24% higher than the 2019 pre-pandemic core net income of Php4.2 billion, and surpassing our forecast of Php4.5 billion, underpinned by positive contributions across all business segments. Consolidated net sales grew 17% yoy to Php178.8bn, surpassing pre-pandemic levels, supported by 102 net store additions and 11.8% blended same-store sales growth (SSSG). <\/p>\n\n\n\n

Sales to be boosted by 180-200 net new stores in 2023<\/strong><\/p>\n\n\n\n

Growth in 2023 will be driven further by net store additions of 180-200 stores in the
pipeline, for which RRHI has earmarked capex of Php5.0-7.0 billion. Most new stores will be under the essential formats, while around 20 stores will be under each of the discretionary formats.<\/p>\n\n\n\n

Dilutive earnings impact from the BPI-Rbank merger and BPI shares acquisition<\/strong><\/p>\n\n\n\n

As a result of the sale of Robinsons Bank, RRHI\u2019s equity in net earnings of associates will be practically wiped out in 2023. In addition, estimated financing cost, net of tax benefit, for the purchase of the additional BPI shares amounts to Php777 million in the next two years. <\/p>\n\n\n\n

However, RRHI will earn dividend income from its 6.5% stake in BPI which we forecast would amount to Php439 million in 2023 and Php720 million in 2024. As the dividend income from BPI will not fully cover the financing cost for the share acquisition and the loss of equity in earnings from Rbank, the net effect of the investments is estimated to be 11%\/9% dilutive to our 2023\/2024 net income forecast.<\/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>