{"id":324291,"date":"2023-08-04T00:08:35","date_gmt":"2023-08-03T16:08:35","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324291"},"modified":"2023-08-04T01:09:37","modified_gmt":"2023-08-03T17:09:37","slug":"stock-in-focus-ayala-land-inc-ali-4-aug-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-ayala-land-inc-ali-4-aug-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Ayala Land, Inc. (ALI) – 4 Aug 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>ALI<\/td><\/tr>
Company Name<\/strong><\/td>Ayala Land, Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>4 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 36.90<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Given ALI\u2019s outperformance as demand for their residential segment pick up and travelers return, we therefore recommend a BUY on ALI based on consensus Target Price of P36.90.<\/p>\n\n\n\n

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

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

Resi and commercial leasing fueled topline growth<\/strong><\/p>\n\n\n\n

ALI posted P11.4-Billion income in the 1st half (1H) of 2023, outperforming consensus estimates, at a 50.29% contribution versus its pre-pandemic average at 46.32%. The key drivers for the rise in revenues for their property development segment is the pickup in residential sales (+18% YoY) and higher office for sales (+46% YoY). The rise in their commercial leasing segment was driven by their Shopping Centers (+33% YoY), and their Hotels and Resorts (+33% YoY). We note though that earnings were supplemented by a year-on-year dip in their effective tax rate by 350bps to 17.1% in 1H 2023.<\/p>\n\n\n\n

After a string of disappointing resi data, this quarter was a positive surprise<\/strong><\/p>\n\n\n\n

The 18% rise in their residential segment is attributable to higher completion and bookings as demand displayed sequential improvement, evidenced by a 21% YoY growth of their Sales Reservations. The company\u2019s ALVEO project in BGC, valued at P18.1-Billion, drove the bulk of sales reservations growth with 28% of its units sold in just 1 month. In the medium term, residential demand will continue to be composed of their higher end offerings. Demand from Local Filipinos increased by 19% and their share in the buyer mix ended up at 67%, up 100bps YoY. Management also cited that cancellation rates in the resi segment saw slight improvement.<\/p>\n\n\n\n

Office segment remains weak<\/strong><\/p>\n\n\n\n

We note that there was some weakness QoQ on their Office for sale revenues (-9%). Further, improvements in resi cancellations was offset by office for sale because of work from home setups, leading to higher vacancies. This resulted in systemwide cancellations remaining mostly the same.<\/p>\n\n\n\n

Revenge travel continues to drive H&R<\/strong><\/p>\n\n\n\n

The growth of their Hotels and Resorts (H&R) segment (+33% YoY) was driven by resurgence of travelers as shown by the 15 ppts increase in average occupancy for hotels YoY and 19 ppts increase in resorts occupancy YoY. This was further strengthened by the newly opened Seda Nuvali and Seda Manila Bay.<\/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>