{"id":324621,"date":"2023-08-24T00:57:53","date_gmt":"2023-08-23T16:57:53","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324621"},"modified":"2023-08-24T00:57:57","modified_gmt":"2023-08-23T16:57:57","slug":"stock-in-focus-megaworld-corp-meg-24-aug-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-megaworld-corp-meg-24-aug-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Megaworld Corp. (MEG) – 24 Aug 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MEG<\/td><\/tr>
Company Name<\/strong><\/td>Megaworld Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>24 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 3.10<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Given MEG\u2019s earnings underperformance despite year-on-year growth in all of its segments. We recommend a HOLD for MEG.<\/p>\n\n\n\n

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

MEG posted 1H 2023 net income of P7.88-Billion, a 33.9% year-on-year (YoY) growth. The numbers resulted in an underperformance of -9.9% based on consensus estimates. All of their segments posted growth, led by Real Estate (+12.2% YoY), Rental (+17.2% YoY), Hotel Operations (+58.3% YoY). We note that this growth was achieved despite a 110bps increase in their effective tax rate (18.30% vs 19.4%).<\/p>\n\n\n\n

Visible demand<\/strong><\/p>\n\n\n\n

Real Estate Sales revenue increased 12% YoY, attributable to improved construction activity and higher completion rate. Management cited a focus for vertical launches, which will largely be outside Metro Manila where most of growth is seen. Majority of these launches (74%) target the upper-middle to high-end market. Reservation Sales picked up sharply, registering a 49% growth YoY. Cancellation rates remain manageable at 5%. Stable offices. Office rentals rose 4% YoY on the back off growing transactions from BPOs and traditional. However, pre-terminations and non-renewals resulted to a 3ppts decline in their occupancy, which is currently at 89%. Management cited that despite this dip, occupancy is still much higher than industry at 81.6%.<\/p>\n\n\n\n

Surge in rental income<\/strong><\/p>\n\n\n\n

Mall Rentals posted 71% YoY growth as mall spending increased through higher average basket size and removal of rental concessions was completed starting January 1, 2023. Foot traffic also experienced a 43% YoY growth while occupancy stands at 91%, up 1ppts from last year. <\/p>\n\n\n\n

Travelers return<\/strong><\/p>\n\n\n\n

Hotel Operations picked up 58% YoY as domestic tourism and MICE activities pick up. Occupancy gained 3ppts as increase in arrivals were experienced due to the launch of Boracay New Coast and Mactan Newtown.<\/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>