{"id":330298,"date":"2024-11-07T01:08:20","date_gmt":"2024-11-06T17:08:20","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330298"},"modified":"2024-11-07T01:09:44","modified_gmt":"2024-11-06T17:09:44","slug":"stock-in-focus-metro-retail-stores-group-inc-mrsgi-7-nov-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-metro-retail-stores-group-inc-mrsgi-7-nov-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Metro Retail Stores Group, Inc. (MRSGI) – 7 Nov 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MRSGI<\/td><\/tr>
Company Name<\/strong><\/td>Metro Retail Stores Group, Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>7 Nov 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 1.79<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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MRSGI\u2019s market expansion positions it to benefit from this recovery, with significant gains expected as consumer demand rebounds. Overall, we maintain our BUY rating with a target price of P1.79 per share, which presents an appealing upside potential of +49.17% from its last traded price.<\/p>\n\n\n\n

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

Metro Retail Stores Group, Inc. (MRSGI)\u2019s net revenue continues to surge with its continuous expansion and increasing presence in the service and retail industry. In the 1st half (1H) of 2024, the company\u2019s net sales increased by +6.10% year-on-year (y\/y) to P18.19 billion as both food retail and general merchandise business increased by +7.9% and +0.9% respectively in sales driven by improved sales of existing stores, improved customer traffic, and sales from newly opened stores. <\/p>\n\n\n\n

However, despite increasing sales and opening of new stores, MRSGI incurred a decline in 1H 2024 Net Income (NI) by -26.6% to P100 million from P137 million y\/y due to lower blended margin on growing share of food retail to the revenue mix, as well as increase of non-cash charges for the Company\u2019s expansion programs. Moreover, MRSGI\u2019s cost reduction, optimization, and efficiency initiatives bears result in 1H 2024 as OPEX rose slightly by 2.2% in absolute terms, but decreased by -0.70% y\/y.<\/p>\n\n\n\n

Moreover, as of 1H 2024, MRSGI operates a robust network of 64 stores\u201439 in the Visayas, 10 in Metro Manila, and 12 in Luzon\u2014while advancing its expansion with 4 construction projects underway and 5 more that already started its groundbreaking. The launch of its first Metro Home Improvement store enhances its product offerings and revenue mix, and the opening of a three-hectare distribution center supports supply chain efficiency in Luzon, capable of handling up to 25,000 cases daily with a focus on sustainability.<\/p>\n\n\n\n

Building on this momentum, MRSGI’s store formats all reported year-on-year sales growth in 1H 2024. Supermarket sales rose by +2.7%, reaching P9.54 billion, up from P9.29 billion in the same period last year. Department stores saw a +1.3% increase, generating P3.82 billion in sales compared to P3.77 billion previously, while Hypermarkets experienced a significant +9.0% boost, with sales climbing to P4.26 billion from P3.91 billion. This sales growth is largely attributed to MRSGI’s ongoing expansion efforts, which have enhanced market reach and driven increased customer traffic.<\/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>