{"id":330445,"date":"2024-11-18T15:38:13","date_gmt":"2024-11-18T07:38:13","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330445"},"modified":"2024-11-18T15:41:18","modified_gmt":"2024-11-18T07:41:18","slug":"stock-in-focus-sm-prime-holdings-smph-18-nov-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-sm-prime-holdings-smph-18-nov-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: SM Prime Holdings (SMPH) – 18 Nov 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SMPH<\/td><\/tr>
Company Name<\/strong><\/td>SM Prime Holdings<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>18 Nov 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 40.30<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We maintain our BUY rating for SMPH on the back of our belief that consumer demand will continue to pick-up in the following quarters and that SMPH is currently poised to take advantage of this. We currently have a Target Price of P40.30 for SMPH which translates to a very healthy upside of 49.2% from its last traded price.<\/p>\n\n\n\n

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

Earnings beat estimates<\/strong><\/p>\n\n\n\n

SMPH posted 34rd quarter (3Q) earnings of P11.8-Billion, beating our estimate of P10-Billion by a notable 17.5% and our 9-months (9M) estimates by 6.2%, driven by greater-than-expected growth in majority of its segments which was spearheaded by malls with 16.4% growth, followed by residential\u2019s 6.6%, and lastly, offices and coastal development\u2019s 4.7%. Hotels, on the other hand, posted flat earnings on a year-on-year (YoY) basis.<\/p>\n\n\n\n

Focus on malls<\/strong><\/p>\n\n\n\n

Mall revenues continued to lead the growth with revenues rising by 8% YoY on the back of an 8% boost in rental income coupled with a 4% revenue increase for their cinemas and event ticket sales sub-segments. We note though that Philippine Mall\u2019s operating income growth of 9% is in stark contrast with China\u2019s 3% decline as consumer demand continue to be weak.<\/p>\n\n\n\n

Given this, SMPH is focusing on the PH market as shown by their recent mall launches in Caloocan and Cebu which added roughly 200k-sqm to their mall portfolio. This remains to be the case next year as SMPH plans to open slightly more than 500k-sqm GFA which will be composed by launches in La Union, Laoag, Zamboanga, and Sta. Rosa.<\/p>\n\n\n\n

On inventory reduction and attracting higher quality buyers<\/strong><\/p>\n\n\n\n

Moving towards their resi segment, revenues grew by 9%YoY to end up at P32.3-Billion, accounting for 32% of total revenues. Despite this positive growth, we note that reservation sales took a nosedive, declining by 47.5% YoY to end up at P47-Billion vs last year\u2019s P89-Billion as management stated its goals to firm up buyer quality through the implementation of several methods, one of which is bumping up the required equity base.<\/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>