{"id":327044,"date":"2024-03-07T01:24:04","date_gmt":"2024-03-06T17:24:04","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327044"},"modified":"2024-03-07T01:24:06","modified_gmt":"2024-03-06T17:24:06","slug":"stock-in-focus-sm-prime-holdings-smph-7-march-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-sm-prime-holdings-smph-7-march-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: SM Prime Holdings (SMPH) – 7 March 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SMPH<\/td><\/tr>
Company Name<\/strong><\/td>SM Prime Holdings<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>7 March 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 44.45<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Moving forward, we are projecting continued growth across all segments, majority of which will come from malls and residential as we expect continued easing inflation to boost consumer demand while eventual lowering of interest rates would encourage people to take out loans to purchase properties. We reiterate our BUY rating for SMPH with a Target Price of P44.45.<\/p>\n\n\n\n

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

Stable earnings<\/h3>\n\n\n\n

SMPH registered a 32.9% year-on-year (YoY) growth in earnings to end up at P40.01-Billion, in-line with our estimates, beating it by only 2.6%. We note that earnings outpaced revenue growth of 21% YoY at P128.1-Billion.<\/p>\n\n\n\n

Malls drive growth<\/h3>\n\n\n\n

Mall revenues grew 29.8% YoY and 9% QoQ as tenant sales and foot traffic is already above pre-pandemic levels at 120% and 119%, respectively. This led to substantial rental income growth of 25% YoY alongside cinema and event ticket sales growth of 86% YoY. We note management stating that the food category contributed significantly to improved rental sales.<\/p>\n\n\n\n

Alongside this, mall long-term occupancy is already back to pre-pandemic levels at 91%, 1ppt higher than 2019\u2019s 90%. For their China malls, it also experienced decent improvement in revenues which was up 16% YoY vs 2022 which was significantly affected by China\u2019s zero covid stance. We note that SMPH is planning to open four new malls for 2024 with a combined GFA of 440k-sqm. We see this as the company\u2019s response towards the improving outlook on consumer demand moving forward.<\/p>\n\n\n\n

Stable resi and offices<\/h3>\n\n\n\n

Resi remains stable, growing by only 7.5% YoY and 8.1% QoQ accounting for 32% of revenues. Sales reservation on the other hand was flat, posting P102.05-Billion in reservation sales, barely above 2022\u2019s P102.0-Billion. We are not expecting sizeable launches for the year as we expect management to focus more on booking revenues currently at P195.7-Billion. <\/p>\n\n\n\n

Alongside this, management also stated their intention to taper launches given their primary goal of achieving 12-month inventory level first. Offices on the other hand delivered low double-digit growth at 13.0% YoY and 8% QoQ as the current office market continue to face headwinds from emerging work trends namely the work-from-home and hybrid setups.<\/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>