{"id":328554,"date":"2024-07-29T02:10:37","date_gmt":"2024-07-28T18:10:37","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328554"},"modified":"2024-07-29T02:10:39","modified_gmt":"2024-07-28T18:10:39","slug":"stock-in-focus-areit-inc-areit-29-july-2024-by-regina-capital-development-corp-2","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-areit-inc-areit-29-july-2024-by-regina-capital-development-corp-2\/","title":{"rendered":"Stock in Focus: Shell Pilipinas Corp. (SHLPH) – 29 July 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SHLPH<\/td><\/tr>
Company Name<\/strong><\/td>Shell Pilipinas Corp.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>29 July 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 11.66<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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SHLPH\u2019s competitive advantage lies in its strong brand equity, extensive distribution network, and commitment to innovation. Strategic partnerships and robust supply chain management provide a significant edge. Additionally, SHLPH\u2019s focus on sustainability and taking on renewable energy initiatives aligns with global trends and regulatory expectations, enhancing its market position and appeal to environmentally conscious public. We maintain our BUY rating on SHLPH with a Target Price of P11.66\/share.<\/p>\n\n\n\n

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

Shell Pilipinas Corporation (SHLPH) reported a 1st quarter (1Q) 2024 Net Income (NI) of P1.41 billion, a significant turnaround from the net loss of -P310 million in 1Q 2023. This recovery is due to strategic cost management and favorable market conditions, leading to improved gross profit margins. However, excluding inventory gains and other one-offs, SHLPH\u2019s core NI fell by -10.6% year-on-year (y\/y) to P685.4 million, mainly due to an ~-11% y\/y decline in sales and marketing volumes, which stood at 941.2 million liters and 932 million liters, respectively.<\/p>\n\n\n\n

SHLPH\u2019s net sales for 1Q 2024 were P59.96 billion, reflecting a -3% y\/y decline. Despite lower revenue, gross profit increased +37% y\/y to P6.11 billion, supported by an -11.5% y\/y decrease in cost of sales to P53.85 billion. Enhanced gross profit margins highlight SHLPH’s efficiency in managing costs and optimizing supply chains. Operating expenses were reduced to P3.74 billion (-12.5% y\/y) due to targeted cuts in repair, maintenance, logistics, and advertising. Finance expenses rose to P939.7mn (+15.4% y\/y) but were partly offset by P44.2 million in forex gains.<\/p>\n\n\n\n

As of March 31, 2024, SHLPH’s total assets increased to P122.92 billion (+6% y\/y), driven by higher inventories and prepayments. Current liabilities rose to P53.43 billion (+11.7% y\/y) due to increased inventory purchases, indicating strategic expansion of credit terms with suppliers. Noncurrent liabilities remained stable at P37.79 billion, maintaining a balanced long-term financial structure. SHLPH continues to prioritize operational efficiency and strategic investments, including expanding its retail network and upgrading refinery capabilities. The company is also focusing on digital transformation and sustainability initiatives to enhance operational resilience and environmental stewardship.<\/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>