{"id":324409,"date":"2023-08-11T00:43:53","date_gmt":"2023-08-10T16:43:53","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324409"},"modified":"2023-08-11T00:43:54","modified_gmt":"2023-08-10T16:43:54","slug":"stock-in-focus-sm-investments-corp-sm-11-aug-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-sm-investments-corp-sm-11-aug-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: SM Investments Corp. (SM) – 11 Aug 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SM<\/td><\/tr>
Company Name<\/strong><\/td>SM Investments Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>11 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 1,148.46<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We continue to recommend a BUY on SM given its healthy potential upside of 27.6%.<\/p>\n\n\n\n

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

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

Results in-line with estimates <\/strong><\/p>\n\n\n\n

SM\u2019s earnings for the first half of the year tracked closely with consensus estimates at 50.0%. Performance was driven largely by the performance of BDO, along with continued demand in the retail segment. We note as well that the company\u2019s portfolio investments have picked up in growth with their share in the earnings mix increasing by 4ppts versus a year ago to 10%. Earnings were somewhat dampened however, by the flattish earnings growth in CHIB as well as in SMPH\u2019s residential revenues.<\/p>\n\n\n\n

BDO remains a money maker, though CHIB lags<\/strong><\/p>\n\n\n\n

BDO continued to see strong performance, fueled by continued NIM expansion from upward loan repricing. The bank\u2019s NIM notably grew by 68bps in Q2, and this subsequently led to 30% expansion in net interest income. A 19% drop YoY in provisioning for the quarter coupled with the 230bps contraction in cost-to-income further complemented earnings performance. CHIB on the other hand, grew at a much slower pace of only 7% for 1H23 due to the bank\u2019s relatively low CASA ratio as well as a 48% drop in non-interest income.<\/p>\n\n\n\n

Retail and malls see strong demand<\/strong><\/p>\n\n\n\n

The retail business meanwhile saw earnings continue to maintain a solid trajectory, as strong consumer spending on fashion, kids, and health and beauty categories allowed for income expansion of 21% YoY. This went hand in hand with the strong performance of SMPH\u2019s malls which saw a 53% increase in revenues as tenant sales continued to recover strongly. Residential sales for 1H23 meanwhile were flat, although there was sequential improvement in Q2 with healthier growth of 13.4% QoQ.<\/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>