{"id":328725,"date":"2024-08-04T13:39:08","date_gmt":"2024-08-04T05:39:08","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328725"},"modified":"2024-08-04T13:39:10","modified_gmt":"2024-08-04T05:39:10","slug":"stock-in-focus-wilcon-depot-wlcon-5-aug-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-wilcon-depot-wlcon-5-aug-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Wilcon Depot (WLCON) – 5 Aug 2024 by RCBC Securities"},"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>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 19.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We have a HOLD rating on WLCON, with a Target Price of Php19.00, as we expect inflation trends and consumer behavior to continue to affect profitability. Although we forecast an increase in net sales for the 2nd half (2H) of 2024 due to seasonality, we expect OPEX to remain high for this year amid changes in wages in the 1st half (1H) 2024 and higher logistics costs. Nevertheless, we believe WLCON\u2019s share price could improve should sentiment and consumer spending pick up in the following quarters.<\/p>\n\n\n\n

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

Net income down 16.9% year-on-year (y\/y)<\/h3>\n\n\n\n

WLCON reported a net income of P1.51 billion, 16.9% lower y\/y, below consensus and our estimates, as operating expenses grew significantly (+8.6%), but net sales barely changed at Php17.18 billion (+0.2% y\/y). Gross profit also slightly moved (+1% y\/y to Php6.84 billion) despite a gross profit margin (GPM) expansion of 30bps to 39.8%. The GPM increased as the higher-margin in-house and exclusive brands’ contribution to total sales increased to 52% from 50.7%. Meanwhile, operating expenses (OPEX) rose 8.6% to Php5.08 billion, leading EBITDA to tumble 13% to Php2.64 billion.<\/p>\n\n\n\n

Flat top line<\/h3>\n\n\n\n

Home Depot stores accounted for 95.8% of total net sales, and their net sales were down 1% y\/y to Php16.47 billion due to transaction count and ticket size slowdown. There were sales additions from new stores, but the impact was offset by the 4.6% drop in same-store sales growth (SSSG).<\/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>