{"id":323028,"date":"2023-05-05T01:40:58","date_gmt":"2023-05-04T17:40:58","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323028"},"modified":"2023-05-05T01:40:59","modified_gmt":"2023-05-04T17:40:59","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-5-may-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-5-may-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 5 May 2023 by AP 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>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 May 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 87.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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At our Target Price of 87.20, we continue to recommend a BUY.<\/p>\n\n\n\n

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

RRHI\u2019s net earnings registered a 54.5% decline to P537 Million, mainly due to higher financing costs from the prior acquisition of a minority stake in BPI. When factoring in only the normal business operations however, core earnings grew by 20.5% and were in-line with both APS (18%) and consensus (20%) estimates. The company\u2019s performance was driven mainly by the low base stemming from the omicron surge last 1Q 2022.<\/p>\n\n\n\n

Revenues registered a 13.1% increase which came mainly from the supermarket (57.4% of sales) and drugstore (17.9% of sales) segments. The former saw its sales expand by 14.1% due to a steep climb in its SSSG from – 0.3% to 8.7%, as well as contributions from new stores. The drugstore segment on the other hand saw slower SSSG of 5.9% (versus last year\u2019s 14.6%), but nevertheless, its sales still grew by 12.5%. Both segments would also see GPM growth of 20bps (supermarket) and 90bps respectively, as a result of improvements in their product mix. Other segments such as the department store, convenience store, and specialty businesses would also see solid growth, although this would be partially dampened by the slight decline (-0.9%) in the DIY segment. Overall EBITDA margins would also dip by 30bps as a result of higher utilities costs and the normalization of rental rates. In absolute figures however, operating profits would still expand by 14.8% due to the solid sales performance of a majority of the segments, as well as margin improvements in its two biggest revenue-drivers.<\/p>\n\n\n\n

Currently, RRHI is now at a net debt position of P5.4-Bn, although it expects this to be highly manageable due to the dividends that will be accruing from their stake in BPI, as well as the company\u2019s own internal cash generation. For the year, RRHI is also guiding CAPEX of P5.0 to 7.0-Bn which will be used for opening 180 to 200 new stores.<\/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>