{"id":330406,"date":"2024-11-14T00:52:15","date_gmt":"2024-11-13T16:52:15","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330406"},"modified":"2024-11-14T00:52:16","modified_gmt":"2024-11-13T16:52:16","slug":"stock-in-focus-phinma-corp-phn-14-nov-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-phinma-corp-phn-14-nov-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: PHINMA Corp. (PHN) – 14 Nov 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>14 Nov 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 32.23<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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While we acknowledge that the pricing of the stock rights offer (SRO) is unattractive, the possibility of either PHN\u2019s parent company or a new institutional investor taking up the unsubscribed shares would remove any potential for overhang. Further, we remain bullish on PHN\u2019s business, so we maintain our BUY rating on PHN with a Target Price of P32.23, which already prices in the additional shares from the SRO.<\/p>\n\n\n\n

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

PHN SRO period begins<\/strong><\/p>\n\n\n\n

PHN\u2019s P1-Billion stock rights offer has kicked off, with shareholders as of November 8 being entitled to subscribe to 1 rights share for every 5.73 common shares held, at an offer price of P20.00 per share. The company intends to use the proceeds to fund the expansion of its construction materials, hospitality, and property development business units, with a portion of the proceeds also allocated for investments in new ventures and generalcorporate purposes.<\/p>\n\n\n\n

Offer price is higher than market price<\/strong><\/p>\n\n\n\n

The recent market downturn has dragged PHN\u2019s share price below P20.00, and as such the SRO is no longer as attractive as it was when the price was set at the end of October. With this in mind, there appears to be very little incentive for shareholders to subscribe to the SRO. <\/p>\n\n\n\n

Some interesting provisions in the prospectus<\/strong><\/p>\n\n\n\n

Interestingly, PHN\u2019s underwriting agreement with AB Capital Investment Corp. (ABCIC) has a provision for a \u201csecond round\u201d of the offer, wherein any rights shares that remained unsubscribed will be offered to eligible shareholders, including PHN\u2019s controlling shareholder. <\/p>\n\n\n\n

There is also a provision for an \u201cinstitutional offer\u201d wherein any rights shares that are left unsubscribed after the second round can be offered to
qualified institutional investors who need not be existing shareholders of PHN. This opens up the possibility of new institutional investors coming in as shareholders, which could be an interesting play.<\/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>