{"id":328687,"date":"2024-08-01T00:59:35","date_gmt":"2024-07-31T16:59:35","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328687"},"modified":"2024-08-01T00:59:37","modified_gmt":"2024-07-31T16:59:37","slug":"stock-in-focus-sm-prime-holdings-smph-1-aug-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-sm-prime-holdings-smph-1-aug-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: SM Prime Holdings (SMPH) – 1 Aug 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SMPH<\/td><\/tr>
Company Name<\/strong><\/td>SM Prime Holdings<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>1 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 38.67<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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In our view, the efforts of the company to capture upcoming demand amidst the improving macroeconomic environment will bear fruit in the future. We reiterate our BUY rating for SMPH with a Target Price of P38.67 which translates to a 33.3% upside from its current price of P29.00.<\/p>\n\n\n\n

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

Surging foot traffic<\/h3>\n\n\n\n

SM Supermalls, the mall unit of SMPH recently reported a substantial 21% year-on-year (YoY) growth in foot traffic for the 1st quarter (1Q) 2024, with 4-Million average daily visitors vs 1Q 2023\u2019s 3.3 Million. This is also just 0.4-Mn shy of pre-pandemic levels of 4.4-Million. <\/p>\n\n\n\n

Management stated that the notable growth was driven by higher spending on leisure and dining. We note that the recent typhoon which caused disruptions in operations due to flooding likely resulted in reduced foot traffic which would directly tenant sales. However, despite the impact to foot traffic, we still see YoY foot traffic growing by high single digits to low teens, especially as performance receives a boost from eventual back to school spending.<\/p>\n\n\n\n

Returning demand<\/h3>\n\n\n\n

We note that Food and non-alcoholic beverage was the largest contributor to 1Q 2024 GDP at 24.5%. Additionally, the country’s 2024 GDP is projected to grow at 6%. With this, malls will be one of the segments to benefit from this pick-up in demand especially as a substantial portion of leased spaces in SMPH\u2019s malls (30%) are composed of food tenants already, putting them in a position to take advantage of this surge in demand. Note that SMPH\u2019s malls segment has reverted to being the top revenue contributor since 2022 after being overtaken by resi for 2020 and 2021 due to the pandemic.<\/p>\n\n\n\n

Leisure growth<\/h3>\n\n\n\n

Aside from the dining portion in malls, another segment which also takes up a considerable amount of leasable space is their non-food tenants category which includes entertainment, comprising 50% of leased spaces. The company has implemented several innovations to cater to this segment as well such as an art museum with 20 themed attractions located in S Maison in Pasay City, Cosplay City at SM City Fairview, and the launching of a Game Park in SM MOA last November.<\/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>