{"id":324526,"date":"2023-08-17T01:38:34","date_gmt":"2023-08-16T17:38:34","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324526"},"modified":"2023-08-17T01:38:35","modified_gmt":"2023-08-16T17:38:35","slug":"stock-in-focus-sm-investments-corp-sm-17-aug-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-sm-investments-corp-sm-17-aug-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: SM Investments Corp. (SM) – 17 Aug 2023 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/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 1,150.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Taking everything into account, we are reaffirming our BUY recommendation on SM, supported by our fair value Target Price of P1,150\/share. Given the current stock price, the company still holds the potential for a significant double-digit upward movement.<\/p>\n\n\n\n

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

In 2Q23, SM Investments Corporation (SM) recorded P19.23 billion in its Net Income (NI) attributable to parent, which is +42.27% higher year-on-year (y\/y). This is supported by its upbeat revenues which totaled to P148.18 billion (up by +15.06% y\/y) as all business segments posted sales growth.<\/p>\n\n\n\n

Its banking units remained to be the top NI contributors which made up 47% of it bottomline mix. BDO was able to keep its crown in being the banking giant, delivering P35.2 billion (+47% y\/y) in NI and P89.5 billion (+29% y\/y) in NII in 1H 2023.<\/p>\n\n\n\n

Meanwhile, CHIB grew its NI and NII slightly by +7% y\/y to P10.8 billion and +16% y\/y to P25.5 billion, respectively, in the first semester of the year. Both BDO and CHIB have a strong NPL coverage, the former having 174%, and the latter having 122%. In its recent briefing, BDO\u2019s management highlighted their intention to concentrate on pricing and loan quality. With that, the group set their loan growth projection at 8%-10% in 2023, comparatively less than the industry’s growth rate.<\/p>\n\n\n\n

Furthermore, the tempered inflation coupled with the low unemployment during the quarter boosted consumer demand, resulting to a +21% y\/y increase to P8.4 billion in SM retail\u2019s bottomline. The firm reported that there has been a shift in consumer expenditure trends relative to the pandemic, as fashion items are now taking a larger portion in the discretionary category vs health-related products.<\/p>\n\n\n\n

In its real estate category, on the other hand, the group saw a +38% y\/y increase to P19.4 billion in its 1H 2023 NI. Looking at its 2Q 2023 figures, its real estate unit was able to grow its NI by +48.90% y\/y to P10.21 billion. Note, however, that its 2Q 2023 performance is still lower than its pre-pandemic figures. The real estate division clearly still needs to make up ground.<\/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>