{"id":325132,"date":"2023-09-28T00:26:59","date_gmt":"2023-09-27T16:26:59","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325132"},"modified":"2023-09-28T00:27:01","modified_gmt":"2023-09-27T16:27:01","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-28-sept-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-28-sept-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 28 Sept 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>RRHI<\/td><\/tr>
Company Name<\/strong><\/td>Robinsons Retail Holdings Inc.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>28 Sept 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 64.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We retain our target price (TP) for RRHI at Php64.00 based on our Discounted Cash Flow (DCF) valuation and reiterate a BUY on the stock. Despite the lower-than-expected earnings in the 1st half (1H) of 2023, tracking at 46% of our estimates, we believe that RRHI will be able to catch up in the latter part of the year on holiday spending and the comeback of tourists. <\/p>\n\n\n\n

Moreover, the addition of RRHI to the PSE Dividend Yield (DivY) Index, effective Sept 26, reinforces confidence in the company as a consistent high-yielding dividend firm. Our TP of Php64.00 offers a potential share upside of 39.1% and a total return potential of 43.5% including 2023 dividend yield of 4.4%.<\/p>\n\n\n\n

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

Anticipating higher growth<\/h3>\n\n\n\n

We believe that owing to Robinsons Retail Holdings, Inc.\u2019s (RRHI) strong brand equity and diversified retail portfolio, RRHI will be able to raise its profitability in the 2nd half (2H) of 2023 on better topline as consumers\u2019 expenditure typically increases on holiday spending. This will be supported by recovering tourism with international visitor arrivals at ~3.0mn (Jan 1 \u2013 July 19), on track to the 4.8mn arrivals targeted by the Department of Tourism. <\/p>\n\n\n\n

On the other hand, the inclusion of RRHI in the PSE Dividend Yield (DivY) Index, effective Sept 26, reinforces confidence in the company as a consistent high-yielding dividend firm.<\/p>\n\n\n\n

Earnings recap<\/h3>\n\n\n\n

RRHI reported 1H 2023 core net income of Php2.4 billion, 11% higher year-on-year (y\/y). RRHI\u2019s consolidated revenues ended 10% higher y\/y to Php91.0 billion supported by a same-store sales growth (SSSG) of 6.3% and contributions from newly-opened stores. The essential store formats; supermarkets and drugstore segments alongside department stores continued to boast double-digit revenue growth. <\/p>\n\n\n\n

Gross profit (GP) increased by 11% to Php21.5 billion on a 20bps margin improvement to 23.7%. Operating income rose 7% to Php3.9 billion despite margins falling 10bps to 4.3% owing to higher topline. Net income attributable declined 34% to Php1.8 billion on higher forex losses and losses from associates. Interest expense from the BPI-share acquisitions in 1Q 2023 was fully offset by the dividend income from the BPI shares.<\/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>