{"id":324598,"date":"2023-08-24T00:24:00","date_gmt":"2023-08-23T16:24:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324598"},"modified":"2023-08-24T00:24:02","modified_gmt":"2023-08-23T16:24:02","slug":"stock-in-focus-dmci-holdings-inc-dmc-24-aug-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-dmci-holdings-inc-dmc-24-aug-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: DMCI Holdings Inc. (DMC) – 24 Aug 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>DMC<\/td><\/tr>
Company Name<\/strong><\/td>DMCI Holdings Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>24 August 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 9.80<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are revising our recommendation on DMC to HOLD with a Target Price of P9.80 as potential upside could only be around ~2% with the prevailing market price. This is based on the presumption that the company’s earnings will contract as we move forward, aligning with the easing of Newcastle coal prices.<\/p>\n\n\n\n

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

DMCI Holdings, Inc. (DMC) banked a total of P36.96 billion revenues in 2Q 2023, a downtick from the P37.70 billion in the same quarter last year. This then yielded a total attributable Net Income (NI) of P8.24 billion, which is -8.72% lower year-on-year (y\/y).<\/p>\n\n\n\n

All its core biz dampened y\/y with the exception of its electricity sales, which saw growth. It\u2019s coal mining segment, contributing bulk of its revenues, plunged by -6.49% y\/y to P16.96 billion in 2Q 2023 with the easing of Newcastle coal prices. SMPC reported that the rainy season resulted to lower coal production at 3mn MT (-12% y\/y) as well as higher strip ratio (17.7 vs 11.7) during the quarter. <\/p>\n\n\n\n

On the bright side, it is worth noting that coal exports increased as demand from China and South Korea gained momentum. In fact, the 2Q 2023 exports have outpaced domestic demand. Just recently, the firm announced that they expect SMPC to have more coal exploration activities as coal supply in Semirara Island depletes. All in all, we expect its coal division to ease down moving forward coming from a high base with the assumption that the coal prices have already peaked in the medium-term, albeit could still surge in 3Q23-4Q23 amidst the early winter restocking.<\/p>\n\n\n\n

Looking at its real estate sales, there was a drop of -9.40% y\/y, totaling P5.89 billion. This dip stemmed on lower units sold and higher sales cancellations. Unsold units of the firm leaped by +35% y\/y to P64.2 billion driven by the introduction of new supply during the quarter. DMCI Homes\u2019 landbank expanded by +2% y\/y to 221ha with their land expansion in Mindanao. Despite the y\/y drop in revenues, note that real estate sales of the firm is still +17.10% higher than its P5.03bn topline in 2Q19. Contrastingly, electricity sales of the firm saw renewed strength, accelerating by +32% y\/y to P8.97 billion due to higher electricity sales coupled with lower fuel costs.<\/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>