The stocks that we continue to have a positive stance in the Philippine shopping malls sector are SMPH and RLC for property given their substantial exposure to consumer demand through their expansive mall portfolios, and RRHI for retail as its broad range of brands places the company in a position to cater towards the demand of the entire consumer spectrum. <\/p>\n\n\n\n
Given the plentiful reasons that we have stated, we reiterate our BUY calls for the following stocks.<\/p>\n\n\n\n
SM Prime Holdings, Inc. (SMPH) \u2013 Buy, with Target Price of P40.30
Robinsons Land Corp. (RLC) \u2013 Buy, with Target Price of P22.84
Robinsons Retail Holdings Corp. (RRHI) \u2013 Buy, with Target Price of P63.97<\/p>\n\n\n\n
A quarter of strength<\/strong><\/p>\n\n\n\n The last quarter of the year has historically been the strongest, consumer spending wise, as these last months mark the distribution of additional employee compensation such as the 13th month pay and Christmas bonuses. This is then further bolstered by an increase in the inflow of OFW remittances, which has accounted for 26.5% of full-year remittances, on average, for the past seven years. As a result of these expectations, we believe that a number of listed companies, specifically those with significant exposure to the consumer scene as the main beneficiaries of the holiday-induced spending.<\/p>\n\n\n\n Let\u2019s go to the mall<\/strong><\/p>\n\n\n\n Colliers\u2019 Q3 data showed us that Food and Beverage (F&B) alongside Fashion are the two types of retailers that have continued to grab a decent chunk of space in malls, some examples of these would be Tsujiri and Tsokolateria in GH Mall, Le Labo in Greenbelt and SM MOA, Foot Locker in Robinsons Manila and Opus Mall, and the Gordon Ramsay Bar and Grill in Newport Mall. <\/p>\n\n\n\n Taking a look at the numbers, we note that F&B and Fashion accounts for a notable portion of new and upcoming retailers across Metro Manila at 39% and 23%, respectively. We believe that this trend will continue to be the case in the following quarters as easing inflation coupled with the recent wage hikes eventually translate to a boost in spending power.<\/p>\n\n\n\n Taking a look back<\/strong><\/p>\n\n\n\n We saw the index drop by more than 1,000 points over the last few weeks as a result of the pessimistic outlook in the local scene which was primarily driven by the uncertainties brought by Trump\u2019s return to the White House. The sharp decline in share prices hit two sectors (Consumer and Property) particularly hard on the back of tempered rate cut expectations alongside the anticipation of a slowdown in consumer spending which would be attributable to the peso\u2019s weakness. Albeit these expectations have some merit to them, we believe that the recent sell-off was highly exaggerated and greatly unwarranted.<\/p>\n\n\n\n