{"id":329153,"date":"2024-08-27T00:47:01","date_gmt":"2024-08-26T16:47:01","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329153"},"modified":"2024-08-27T00:47:03","modified_gmt":"2024-08-26T16:47:03","slug":"stock-in-focus-puregold-price-club-pgold-27-aug-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-puregold-price-club-pgold-27-aug-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Puregold Price Club (PGOLD) – 27 Aug 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PGOLD<\/td><\/tr>
Company Name<\/strong><\/td>Puregold Price Club, Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 38.98<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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The company has shown its capability to deliver stellar earnings, coupling this with the improving macroeconomic conditions, we rate PGOLD a BUY with a consensus Target Price of 38.98. We think that the stock has been battered by the market too much already and picking it up at current levels could entail a profitable outcome for prospective investors.<\/p>\n\n\n\n

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

Earnings outperform<\/strong><\/p>\n\n\n\n

PGOLD\u2019s earnings managed to outperform consensus estimates by 9.5% to end up at P2.47-Billion for the 2nd quarter (2Q) 2024 on the back of expansions in margin alongside higher foot traffic. Management expects this trajectory to continue moving forward on the back of improving macroeconomic conditions.<\/p>\n\n\n\n

Drivers of growth<\/strong><\/p>\n\n\n\n

Revenue grew by 8% to P98.5-Billion for the 1st half (1H) 2024 and there are several reasons specified as to what drove this growth, including the favorable forex environment coupled with a slight increase in product prices. Looking at the segments, SSSG of both Puregold Stores and S&R Warehouses picked up with the key driver for Puregold SSSG of 1.9% being higher traffic, which increased by 2.4% for the first half while S&R Warehouse\u2019s growth of 2.4% was driven by higher ticket size of 2.5%. PGOLD is seeing continued improvement in SSSG in July as it hovers around the SSSG levels in May towards June. Additionally, we note that membership for both store platforms have been growing steadily as well by 13% YoY which we expect to translate into additional revenues.<\/p>\n\n\n\n

Continuing expansions<\/strong><\/p>\n\n\n\n

The company has opened 10 Puregold Stores, 2 new S&R Warehouses, one of which is being renovated and is targeted to open by next year, lastly, PGOLD also opened 1 new S&R QSR for the year. We continue to see PGOLD continuing store expansion in more provincial areas, particularly the development of \u201csmall box\u201d dense community-centric models which have sizes of 300-500sqm vs the typical store sizes in Metro Manila which range from 1,000-1,500 sqm. The company mentioned that the 2 S&R stores that will be opened for the 2nd half will be located in Bacoor and Sto. Tomas while the 3 stores for 2025 will be in Baliwag, General Trias, and Tarlac. As for the costs associated on a per store basis, PGOLD estimates CAPEX spend between P800-900 Million per store.<\/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>