{"id":327963,"date":"2024-05-17T11:34:07","date_gmt":"2024-05-17T03:34:07","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327963"},"modified":"2024-05-17T11:34:09","modified_gmt":"2024-05-17T03:34:09","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-17-may-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-17-may-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 17 May 2024 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>17 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 50.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We cut our target price (TP) for Robinsons Retail Holdings (RRHI) to Php50.00 as we
adjust our risk-free rate and cost of debt assumptions in line with the current interest rate environment. Nonetheless, we expect RRHI to enter a new period with the finalization of BPI \u2013 Robinsons Bank (Rbank) merger and the departmental shift to the foods segment activate synergies within the group and improve profitability. We believe that RRHI is still heavily undervalued with a PE of 6.5x \u2013 about a quarter
of its 5-yr historical PE of 22.2x. At our Target Price, RRHI provides an attractive share price upside of 31.2%. Its appealing 5.3% 2024 dividend yield may also make for a positive dividend play.<\/p>\n\n\n\n

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

Earnings miss expectations<\/h3>\n\n\n\n

RRHI reported a 1Q 2024 core net income of Php1.2 billion, 9% higher year-on-year (y\/y), below consensus and our estimates. Attributable net income resulted in 9.5x surge in growth to Php5.1 billion due to a one-time extraordinary gain from the BPI-Rbank merger closed earlier this year. Consolidated net sales rose 3% to Php45.9 billion on new store contribution and sustained demand from its essential store businesses; supermarkets and drugstores. <\/p>\n\n\n\n

Blended same-store-sales growth (SSSG) moderated to +0.9% on a high base (1Q23: +9.2%). Gross profit grew 4% to Php10.9 billion on a blended 17bps margin improvement to 23.8% on better category mix, penetration of imported products, and supplier support. EBITDA was flat at Php3.7 billion on an 16bps margin decline to 8.0% on expansion-related costs and other expenses, while operating income was up 4% to Php1.9 billion.<\/p>\n\n\n\n

Essentials continue to drive earnings<\/h3>\n\n\n\n

The essential business; food and drugstores comprise 80% of total sales and 84% of
total EBITDA. Net sales of Foods rose moderately at 3% to Php28.1 billion on a
normalized SSSG of +1.7%, while EBITDA was up 2% to Php2.3 billion despite a 20bps margin decline to 8.3% on higher topline, partially offset by expansion-related costs. Drug store sales climbed 10% to Php8.8 billion on an SSSG of 6.5% on sustained demand for prescription and over-the-counter OTC) drugs, while EBITDA gained 9% to Php752mn on higher topline, its margins down 20bps to 8.5% also on expansion-related costs.<\/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>