{"id":331719,"date":"2025-02-28T01:08:38","date_gmt":"2025-02-27T17:08:38","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=331719"},"modified":"2025-02-28T01:08:41","modified_gmt":"2025-02-27T17:08:41","slug":"stock-in-focus-megaworld-corp-meg-28-feb-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-megaworld-corp-meg-28-feb-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: Megaworld Corp. (MEG) – 28 Feb 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MEG<\/td><\/tr>
Company Name<\/strong><\/td>Megaworld Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>28 Feb 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 2.43<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We have repeatedly mentioned our cautiousness for the office sector as a result of the emergence of alternative work set-ups and the recent POGO ban, which results in lower demand for office space. This has started to take effect already as offices contributed only 16.4% of revenues for 2024, down 1.7ppts from 2023\u2019s 18.1%. Albeit the growth posted by other segments were more than enough to offset offices\u2019 lagging growth, we believe that this segment will continue to hinder MEG\u2019s growth potential for the following years. As such, we maintain our HOLD rating for MEG despite the significant upside potential to consensus Target Price of P2.43.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

Earnings in-line with estimates<\/strong><\/p>\n\n\n\n

MEG posted 2024 earnings of P18.7-Billion, up 8.1% year-on-year (YoY), marginally beating estimates of P17.8-Billion. The slight earnings beat was driven by all-around growth across MEG\u2019s real estate portfolio. Real estate sales rose by 19.4%, followed by Malls (+18.9%), Offices (+6.3%), and lastly, Hotels (+34.2%). Resi sustains growth Resi continued to be a primary growth driver for MEG, with revenues for the segment rising by 19.4% driven by strong demand for their offerings in Metro Manila and provincial locations.<\/p>\n\n\n\n

We note that the company launched four new townships last year across the country, two of which are located in Batangas, one in Laoag, and one in Cagayan de Oro. We see this as a positive progression given the on-going shift of demand towards Areas Outside of NCR.<\/p>\n\n\n\n

Strong leasing<\/strong><\/p>\n\n\n\n

Taking a look at MEG\u2019s leasing portfolio, revenues posted a growth rate of 10% YoY driven by 18.9% YoY revenue growth from Malls backed by a pick-up in foot traffic and consumer spending. Offices, on the other hand, remained stable with revenues growing by 6.3% as the company managed to close 140,000 sqm of new leases, 70,000 sqm of which was the turnover of the International Finance Center in Uptown Bonifacio to JPMorgan Chase.<\/p>\n\n\n\n

Banner year for hotels<\/strong><\/p>\n\n\n\n

We note management stating that their Hotels and Resorts segment achieved yet another banner year, registering the highest growth rate among all their segments (+34.2% YoY) on the back of traveler resurgence. We note that the company already started the construction of the Mactan Expo located in Cebu, which will contribute an additional 2,500 room keys and further boost their hospitality portfolio.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Check how many brokers recommend this stock<\/h2>\n\n\n\n
\n
All Stock Rankings<\/a><\/blockquote>