{"id":329830,"date":"2024-10-10T01:34:02","date_gmt":"2024-10-09T17:34:02","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329830"},"modified":"2024-10-10T01:34:03","modified_gmt":"2024-10-09T17:34:03","slug":"stock-in-focus-phinma-corp-phn-28-may-2024-by-ap-securities-2","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-phinma-corp-phn-28-may-2024-by-ap-securities-2\/","title":{"rendered":"Stock in Focus: PHINMA Corp. (PHN) – 10 Oct 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PHN<\/td><\/tr>
Company Name<\/strong><\/td>PHINMA Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>10 Oct 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 31.88<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Even without considering PHN\u2019s construction materials, property development, and hospitality business, the firm is obviously undervalued at these levels. We concede
that the risk from the company\u2019s limited tradability is a significant barrier to price discovery, as only around 0.11% of its 63.0-Mn publicly-held shares are traded daily. However, even after applying an extremely high conglomerate discount to account for this risk, we still arrive at a Target Price estimate of P31.88 for PHN which represents a potential upside of 51.8% from its last traded price. Considering this, we maintain our rating of Strong Buy for PHN.<\/p>\n\n\n\n

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

PEHI receives first tranche of KKR investment<\/strong><\/p>\n\n\n\n

Phinma Education Holdings, Inc. (PEHI), PHN\u2019s 66.4%-owned subsidiary, has received P2.5-Billion in fresh funds from a global investor group led by KKR. This represents around 70.2% of the investment into PEHI agreed upon by PHN and KKR in May, which totals around P3.6-Billion.<\/p>\n\n\n\n

In addition, KKR through Phoenix Investments II Pte Ltd has acquired secondary shares held by Asian Development Bank (ADB), Nederlandse Financierings- Maatschappij voor Ontwikkelingslanden N.V. (FMO), and Kaizen Private Equity II Pte. Ltd. (Kaizenvest II), who all invested in the Company in 2019. The KKR group will eventually hold 34.4% of PEHI once the full transaction is concluded.<\/p>\n\n\n\n

Funding the next stage of PEHI\u2019s growth<\/strong><\/p>\n\n\n\n

This first tranche is more than sufficient to cover PEHI\u2019s planned capex of P2.0-Billion this year, and our forecasted capex of around P2.3-Billion next year. We expect the funds to go towards expanding PEHI\u2019s current facilities as it works towards reaching its goal of 175,000 students by 2025 and 350,000 students in the next five years. <\/p>\n\n\n\n

We also note a substantial shift in recent statements from the company, which now refer to serving underserved youths in Southeast Asia as opposed to its previous statements of serving underserved youths in the Philippines. PEHI has previously said that it is looking at potential acquisitions in Indonesia, Vietnam, and Cambodia in addition to its existing school in Karawang, Indonesia.<\/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>