{"id":330994,"date":"2024-12-19T01:07:14","date_gmt":"2024-12-18T17:07:14","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330994"},"modified":"2024-12-19T01:07:16","modified_gmt":"2024-12-18T17:07:16","slug":"stock-in-focus-jg-summit-holdings-jgs-19-dec-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-jg-summit-holdings-jgs-19-dec-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: JG Summit Holdings (JGS) – 19 Dec 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>JGS<\/td><\/tr>
Company Name<\/strong><\/td>JG Summit Holdings<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>19 Dec 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 36.58<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Despite the cloudy outlook surrounding some of JGS\u2019 subsidiaries, with JG Summit Olefins Corporation (JGSOC) continuing to be the main concern, we maintain our BUY rating for the stock as we think that this has already been priced in. This is further solidified by the fact that the stock is currently trading at a BF 12M PE of 7.6x which is already well-below both its 10-year average PE of 18.5x and -1SD PE of 12.5x. Upside remains substantial at 82% towards consensus Target Price of P36.58.<\/p>\n\n\n\n

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

Temporary shutdown<\/strong><\/p>\n\n\n\n

An article from Manila Bulletin stated that the Gokongwei Group\u2019s JGS is looking to temporarily shutdown its petrochemical business JG Summit Olefins Corporation n(JGSOC) with the goal of reducing operational losses. The company will implement the aforementioned shutdown for four months, starting on January 2025 as the company strategizes on the steps to be taken moving forward amidst the current challenges in the industry.<\/p>\n\n\n\n

Challenged earnings<\/strong><\/p>\n\n\n\n

We note that this segment has dragged the company\u2019s earnings over the past years as the persistent global oversupply for polymers continued to drive margins to historic lows. This is all the more concerning as polymers accounted for a staggering 62% of JGSOC\u2019s Sales Volumes for 9M24. <\/p>\n\n\n\n

Given this negative progression, the massive 52.9% revenue growth for the segment did not translate to earnings, as it posted an even larger loss of P11.4-Billion which is a 29.5% YoY decline for the first nine months of the year. Management projects that global demand for petrochemicals will only catch up to supply near the end of the decade, which leads to our tempered expectations for this segment over the next five years.<\/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>