{"id":324416,"date":"2023-08-11T00:55:19","date_gmt":"2023-08-10T16:55:19","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324416"},"modified":"2023-08-11T00:55:20","modified_gmt":"2023-08-10T16:55:20","slug":"stock-in-focus-wilcon-depot-wlcon-11-aug-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-wilcon-depot-wlcon-11-aug-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Wilcon Depot (WLCON) – 11 Aug 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>WLCON<\/td><\/tr>
Company Name<\/strong><\/td>Wilcon Depot Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/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 28.80<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are revising our Target Price to P28.80 to take into account the shift in the public\u2019s behavior. Nevertheless, our BUY rating is retained as our Target Price still offers an upside potential of around +27% from WLCON\u2019s last traded price.<\/p>\n\n\n\n

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

Wilcon Depot, Inc. (WLCON) saw its bottomline to moderate in 2Q 2023 as the public\u2019s attention shifted from home improvement to revenge travel. During the quarter, the publicly-listed firm reported a Net Income of P856 million, reflecting a decline of -15% year-on-year (y\/y).<\/p>\n\n\n\n

WLCON concluded 1H 2023 with a topline of P17.15 billion (+8% y\/y) and Net Income of P1.82 billion (-2% y\/y). The contraction in the bottomline came about on lower Net Profit Margin (NPM) of 10.60% (-1pp y\/y) as opex rose faster than the increase in reported supplier support.<\/p>\n\n\n\n

Meanwhile, net sales marginally rose by +4% y\/y to P8.62 billion due to having a wider footprint of 85 stores after opening two stores during the quarter. In terms of sales contribution, Depot format still accounted for 97% of the topline, followed by Home essentials with 2%. The balance or 0.9% stemmed from Projects. However, SSSG slipped by -3.4% y\/y as foot traffic and transaction count in older stores moderated.<\/p>\n\n\n\n

GPM, on the other hand, improved by +59bps y\/y to 39.51% mainly driven by better-margin-generating products of WLCON, namely in-house and exclusive brands. However, WLCON\u2019s NPM contracted by -2pps to 9.92% on the back of higher expansion-related expenses, partially offsetting the increase in supplier support. Hence, explaining the +20% y\/y jump its opex. Moreover, it should be noted that expansion-related expenses will likely sustain its momentum in the quarters to come as the management underscored its intention to keep the pace of WLCON\u2019s expansion\u2014to have 100 stores by 2025.<\/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>