{"id":326776,"date":"2024-02-16T01:35:44","date_gmt":"2024-02-15T17:35:44","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326776"},"modified":"2024-02-16T01:35:46","modified_gmt":"2024-02-15T17:35:46","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-16-feb-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-16-feb-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 16 Feb 2024 by Regina Capital Development Corp."},"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>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>16 Feb 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 60.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are reiterating our BUY recommendation on RRHI with a Target Price of P60.00, a potential upside of +67.13% as the stock plunged by almost half of its price a year prior. We attribute our rating to continuous store expansions and steady margins. The stock is trading at a discount at 10.06x 2024 Price-Earnings (P\/E) ratio.<\/p>\n\n\n\n

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

Robinsons Retail Holdings, Inc. (RRHI) Core net income in 4Q 2023 declined by -5.9% y\/y to P1.8 billion. Net income to parent rose by +7.27% y\/y to P1.54 billion,
and by +97% quarter-on-quarter (q\/q) as the retailer received dividends from the BPI acquisition. 2023 results show that core net income has remained relatively flat, a slight increase of +0.59% y\/y to P5.59 billion. <\/p>\n\n\n\n

Net income to parent saw a sharp decrease of -29.46% y\/y to P4.13 billion due to a reversal of equitized earnings, given the recognition of the Robinsons Bank merger with BPI along with losses from startup investments of -708 million, mostly coming from GoTyme. The startup company is expected to breakeven some time in 2025.<\/p>\n\n\n\n

Revenues grew at a slower rate for 4Q 2023, rising by +4.24% y\/y to P53.93 billion. For 2023, this grew by +7.44% y\/y to P192.13 billion. In terms of revenue contribution in 4Q 2023, 55.6% of total sales are from department stores (P29.97 billion). Most of the increase in topline came from drug stores, which registered a double-digit growth of +14.4% y\/y to P8.95 billion. <\/p>\n\n\n\n

Prescription drugs, specifically maintenance medicines led to the growth of the drugstore segment. Other segments registered either low-digit declines or increases. In terms of EBITDA in 4Q 2023, Supermarket, Convenience Store, and Drug Store all recorded double-digit growth in the teens. <\/p>\n\n\n\n

Stronger performance under convenience stores is attributed to a stronger performance in the RTE categories (39% of sales under Uncle John\u2019s). Specialty stores dropped by – 45.01% y\/y to P225 million as this segment fared better during the pandemic as demand for appliances and electronics fell, along with an increase in operating
expenses.<\/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>