{"id":324040,"date":"2023-07-13T01:04:11","date_gmt":"2023-07-12T17:04:11","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324040"},"modified":"2023-07-13T01:04:12","modified_gmt":"2023-07-12T17:04:12","slug":"stock-in-focus-megawide-construction-corp-mwide-13-july-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-megawide-construction-corp-mwide-13-july-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Megawide Construction Corp. (MWIDE) – 13 July 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MWIDE<\/td><\/tr>
Company Name<\/strong><\/td>Megawide Construction Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>13 July 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 5.71<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

After combining the Book Values (BV) of MWIDE and PH1 and excluding the cash paid for the transaction and the residual value of the Mactan-Cebu Airport, we arrive at a Target Price of P5.71 per share for MWIDE.<\/p>\n\n\n\n

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

MWIDE enters real estate business<\/strong><\/p>\n\n\n\n

MWIDE recently disclosed that it would be acquiring 100% of fellow Citicore subsidiary PH1 World Developers for P5.2-Billion (P8.97\/share), with the consideration to be paid in cash. PH1 is a real estate developer that focuses on developing and selling condominiums and residential units to the affordable and mid-income market. <\/p>\n\n\n\n

Given its core competencies in the field of construction, this move grants natural synergies for MWIDE given that it can leverage its expertise in order to construct high quality residential projects at lower costs and with more efficiency. MWIDE\u2019s name recognition in the field of structure development also complements PH1\u2019s residential units.<\/p>\n\n\n\n

PH1 currently has four main projects: The Hive, My Enso Lofts, Modan Lofts Pasco, and Modan Lofts Ortigas Hills. Aside from these, two more projects are also in the pipeline. The Hive, My Enso Lofts, and Modan Lofts Ortigas have a combined project value of P15.60-Billion.<\/p>\n\n\n\n

MWIDE Valuation<\/strong><\/p>\n\n\n\n

We opted to use a multiples-based comparison in order to value MWIDE, with DMC as the benchmark.<\/p>\n\n\n\n

From DMC\u2019s market cap of P122.15-Billion, we stripped out its coal, power, and nickel mining components in order to arrive at a market value for its residential and construction segments (P48.93-Billion). We then did the same to its Book Value, in order to isolate the book value of its residential & construction segments. Aggregating the Market Cap and Book Value then gives us a P\/B multiple of 1.28x.<\/p>\n\n\n\n

Applying a 20% discount to this, our benchmark multiple comes in at 1.03x. After combining the Book Values of MWIDE and PH1 and excluding the cash paid for the transaction and the residual value of the Mactan-Cebu Airport, we eventually arrive at a price per share of P5.71.<\/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>