{"id":328118,"date":"2024-05-30T22:03:27","date_gmt":"2024-05-30T14:03:27","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328118"},"modified":"2024-05-30T22:03:32","modified_gmt":"2024-05-30T14:03:32","slug":"stock-in-focus-vista-land-lifescapes-inc-vll-30-may-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-vista-land-lifescapes-inc-vll-30-may-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Vista Land & Lifescapes, Inc. (VLL) – 30 May 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>VLL<\/td><\/tr>
Company Name<\/strong><\/td>Vista Land & Lifescapes, Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>30 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 2.04<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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The change in our rating from HOLD to BUY is justified by the undervaluation story of the stock, which is currently trading at 0.16x Price-to-Book (P\/B) ratio, well below its 5-year average P\/B of 0.42x. <\/p>\n\n\n\n

We estimate that a partial reversion to this historical average would translate to a Target Price of P2.04\/share. Note, however, that a revision in our rating could take place in the event that the risks that we presented do materialize.<\/p>\n\n\n\n

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

On earnings<\/h3>\n\n\n\n

VLL managed to deliver 11% year-on-year (YoY) earnings growth at P3-Billion for the 1st quarter (1Q) 2024 as its segments continued to deliver substantial all-around growth. Real estate revenues posted 10% YoY growth while Rental income from their commercial spaces delivered a stable 13% YoY growth.<\/p>\n\n\n\n

Resi growth continues<\/h3>\n\n\n\n

Revenue breakdown for the company\u2019s resi sub-segments is as follows: (a.) Communities Philippines, which focuses on the low-income segment, delivered 46% of resi revenues, (b.) Camella delivered 28%, (c.) Vista Residences, which focuses on vertical developments, contributed 17%, while their higher end brands Brittany and Crown Asia contributed a combined 9% of revenues. <\/p>\n\n\n\n

This breakdown has largely been unchanged through the years, meaning the company\u2019s clientele has remained skewed towards the low to mid income market. This means that VLL will benefit greatly from a clearer rate cut outlook since lower income clients are more sensitive to movements in interest rates. As the BSP cuts rates in the future, this would likely boost demand for majority of VLL\u2019s offerings.<\/p>\n\n\n\n

Provincial potential<\/h3>\n\n\n\n

We see VLL\u2019s continued focus on launching projects outside of Metro Manila as something positive given the ongoing shift in demand towards the provinces. This is evidenced by 3 out of 4 of their 1Q24 launches, namely Querencia Towers in Vigan, Bramasole in Laoag, Ilocos Norte, and Ourea in Bukidnon, all of which have a starting price range of P5.6-Million to P6.2-Million. We note that the bulk of the company\u2019s land bank (60% of the total) remains concentrated in provincial areas, thereby positioning VLL as a beneficiary of the shifting demand trends.<\/p>\n\n\n\n

Advising slow accumulation<\/h3>\n\n\n\n

Despite decent earnings growth from the company alongside a brighter outlook, the key risk that we are seeing is the company\u2019s ability to sell its already swelling inventory amidst an aggressive expansion and build-up. Upon seeing their CAPEX for the year however, the P30-Billion allocation may indicate that the company will continue to expand despite the already steep levels of existing inventory. This is more evident when we compare this year\u2019s CAPEX to last year\u2019s P7.1-Bn.<\/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>