{"id":327969,"date":"2024-05-17T09:40:19","date_gmt":"2024-05-17T01:40:19","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327969"},"modified":"2024-05-17T11:40:27","modified_gmt":"2024-05-17T03:40:27","slug":"stock-in-focus-wilcon-depot-wlcon-17-may-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-wilcon-depot-wlcon-17-may-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Wilcon Depot (WLCON) – 17 May 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>WLCON<\/td><\/tr>
Company Name<\/strong><\/td>Wilcon Depot Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/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 23.60<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are revising our Target Price to P23.60 to take into account the shift in the consumer\u2019s behavior considering economic uncertainties in 2024 that might affect the operation of the company. Nevertheless, we retain our BUY recommendation as we are optimistic about the growth of the company as it continues to expand and increase its depot, DIW and project-based operations.<\/p>\n\n\n\n

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

The country\u2019s leading home improvement retailer, WLCON registered a -2.5% year-on-year (y\/y) decline to P8.31 billion brought by the early Easter holiday season which resulted to shortened store operations for the firm.<\/p>\n\n\n\n

The company\u2019s 2024 report showed decrease in SSSG of -7.9% y\/y mainly attributed to the drop in transaction count in March as the Lenten season prompted WLCON\u2019s stores to close, combined with the postponement of other construction projects. This brought the firm\u2019s bottomline to narrow by – 23.1% y\/y to P740 million.<\/p>\n\n\n\n

In 1Q 2024 the depot stores segment revenue went down -4% y\/y to P7.87 billion. Due to the decline, the company has decided to continue to pursue its (ABCDE) loyalty program to potentially boost the number of transactions from professionals and contractors that could uphold its growth. The Do-It-Wilcon (DIW) segment, which caters the need of DIYers that offers customers with homes must-haves, recorded a total sales of P232 million growing by +37% y\/y. <\/p>\n\n\n\n

The profitability surged following the nationwide expansion, which includes the opening of 3 additional stores. Furthermore, the project based segment has a notable increase in transaction specifically with huge institutional accounts that led to a substantial growth of +108% y\/y to P105mn in this segment.<\/p>\n\n\n\n

Meanwhile, cost of sales consequently contracted with the weaker revenues,
plunging by -3.4% y\/y to P4.9 billion. The 1Q 2024 GPM of the firm stood at 39.9%,
slightly better compared to 1Q 2023\u2019s GPM of 39.44%.OPEX, on the other hand, still increased despite of massive expansion expenses such as depreciation and trucking services.<\/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>