{"id":324682,"date":"2023-08-30T17:52:41","date_gmt":"2023-08-30T09:52:41","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324682"},"modified":"2023-08-30T17:52:43","modified_gmt":"2023-08-30T09:52:43","slug":"stock-in-focus-puregold-price-club-pgold-30-aug-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-puregold-price-club-pgold-30-aug-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Puregold Price Club (PGOLD) – 30 Aug 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PGOLD<\/td><\/tr>
Company Name<\/strong><\/td>Puregold Price Club, Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>30 Aug 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 45.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We retain our BUY recommendation for PGOLD with a Target Price of P45.00, with an upside of at least 60% due to continuous store expansions that can provide uplifts in PGOLD\u2019s bottomline.<\/p>\n\n\n\n

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

Puregold Price Club, Inc (PGOLD)\u2019s net income in 2Q 2023 declines by -2.66%
year-on-year (y\/y) to P1.99 billion, while 2H 2023 rises by +4.78% to P4.4 billion. Inflationary pressures affected bottomline growth as margins tightened and operating expenses grew substantially. The company\u2019s topline, however, grew +7.20% year-on-year (y\/y) to P46.88 billion.<\/p>\n\n\n\n

For Puregold excluisvely, revenues rose by +6.51% y\/y to P32.41 billion, while bottomline rose +12.06% y\/y to P1.01 billion. Meanwhile, S&R’s revenues rose by +8.72% y\/y to P14.47 billion, while its bottomline dropped -14.51% y\/y to P0.98 billion.YTD margins for Puregold and S&R at 16.75% and 22.19% respectively. The decline is in line with management expectations that the gross profit margin (GPM) for 2023 would decline to 15% and 21% for Puregold and S&R respectively. The decline comes amid competitive pricing and higher cost inventory. Promotions to attract foot traffic has also taken a slight beating to margins under S&R.<\/p>\n\n\n\n

PGOLD has already converted 20\/32 acquired Divimart stores to Puregold stores. With the acquisition of 15 Divimart stores, store expansion targets for the year will be adjusted to 59 new stores for 2023E. 45 Puregold stores from 30 previously, four S&R warehouses and ten QSRs. The company has been opening an average of 25-30 Puregold stores a year. S&R warehouses will open four this year, expecting to average 2-3 openings for the upcoming years.<\/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>