{"id":328101,"date":"2024-05-28T12:53:58","date_gmt":"2024-05-28T04:53:58","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328101"},"modified":"2024-05-28T12:54:00","modified_gmt":"2024-05-28T04:54:00","slug":"stock-in-focus-phinma-corp-phn-28-may-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-phinma-corp-phn-28-may-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: PHINMA Corp. (PHN) – 28 May 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PHN<\/td><\/tr>
Company Name<\/strong><\/td>PHINMA Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>28 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 31.88<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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A back-of-the-envelope estimate of the sum of valuations of PHN\u2019s three major subsidiaries \u2013 Education, Construction Materials, and Property \u2013 valued PHN at P9.1-Billion. We arrived at this estimate by combining the P24.1-Billion deal valuation of Phinma Education, P1.4-Billion valuation of Phinma Property at 0.5x book value, and P2.2-Billion valuation of Construction Materials at 5x FY23 P\/E. <\/p>\n\n\n\n

We then applied a whopping 50% conglomerate discount, as using our usual 20% conglo discount put PHN\u2019s fair value at P51.00 per share. The extremely- discounted estimate translates to a P31.88\/share FV estimate for PHN, or 49.0% higher than its last traded price of P21.40.<\/p>\n\n\n\n

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

Global investor group buys into PHN Education Unit<\/h3>\n\n\n\n

Private equity giants KKR & Co. and Kaizen Private Equity will be investing into Phinma Education Holdings, Inc. (PEHI) in an P8.3-Billion deal. The transaction includes the issuance of P4.5-Billion worth of new shares and a P3.8-Billion buyout of existing shareholders. Following the transaction, KKR and Kaizen will own 30.67% and 3.73% of PEHI, respectively, while PHN will continue to own 61%, according to
Anton Periquet, Chairman of AB Capital Group which acted as the adviser for the transaction.<\/p>\n\n\n\n

Deal values PEHI at P24.1-Billion<\/h3>\n\n\n\n

Considering that the deal values the KKR and Kaizen\u2019s combined stake of 34% at P8.3-Billion, the implied value of PEHI would be P24.1-Billion. This values PHN\u2019s 61% stake at P14.7-Billion, which is 2.4x of PHN\u2019s current market cap of P6.1-Billion.<\/p>\n\n\n\n

But wait, there\u2019s more<\/h3>\n\n\n\n

Education services accounted for only 55% of PHN\u2019s 2023 net income, not including the losses from its BPO operations and inter-segment eliminations. Construction materials, which includes income from Union Galvasteel, Philcement, and Phinma Solar, accounted for 25%, while Phinma Property accounted for 12%. Various investment holdings and the hospitality segment account for the remaining 8%.<\/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>