{"id":332264,"date":"2025-04-22T00:02:00","date_gmt":"2025-04-21T16:02:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=332264"},"modified":"2025-04-21T23:21:00","modified_gmt":"2025-04-21T15:21:00","slug":"stock-in-focus-phinma-corp-phn-22-april-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-phinma-corp-phn-22-april-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: PHINMA Corp. (PHN) – 22 April 2025 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>22 April 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 32.58<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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PHN management said that they are looking to manage CMG\u2019s overall opex this year, and planning to launch more high-margin products to bolster profitability. The company is also expecting the property and hospitality segments to make more meaningful contributions as they continue to expand. In particular, the property unit should get a revenue boost once construction progress surpasses the revenue-recognition threshold later this year. All this would be underpinned by PHN\u2019s mammoth education business, which will continue to expand using funds from the KKR capital infusion. <\/p>\n\n\n\n

Given our continued optimistic outlook on PHN, we maintain our BUY rating with a Target Price (TP) of P32.58. Granted, we will likely make a downward adjustment to our TP after the company has disclosed its full financial statements for the year, to account for 2024 earnings miss and 2023 earnings adjustments, but the TP downgrade is unlikely to be large enough to result in a rating downgrade.<\/p>\n\n\n\n

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

PHN revenues hit the mark, earnings was a massive miss<\/strong><\/p>\n\n\n\n

PHN reported P23.8-Billion in full-year revenues, slightly surpassing our forecast of
P23.4-Billion. However, higher expenses on the Construction Materials Group (CMG) and parent company side resulted in a massive miss in net income attributable to shareholders of the parent, which was reported to be P279.6-Mn in FY24 vs our forecast of P1.1-Billion. The miss was less glaring for consolidated net income, which reached P936.9-Million or a little more than half of our forecast of P1.8-Billion.<\/p>\n\n\n\n

Notably, 3 out of 4 operating segments outperformed our expectations and even the weak property segment reported narrower losses than expected. PHN also adjusted its 2023 net income down by P128.9-Million to account for incorrect reporting of expenses on the side of Union Galvasteel (UGC), which is a unit under CMG.<\/p>\n\n\n\n

PEHI is still the top performer<\/strong><\/p>\n\n\n\n

The education segment under Phinma Education Holdings (PEHI) remained the keystone of PHN\u2019s business, delivering both revenue and net income outperformance by increasing its total enrolment by 11.8% to 163,854. These enrolment numbers are slightly higher than our forecast of 161,032 for 2024, although it must be noted that our estimates did not include the additional students from the December acquisition of SJC Dasmari\u00f1as. According to the company, this latest acquisition was immediately earnings accretive although the impact was barely felt in 2024 due to the acquisition taking place quite late in the year. The contribution of PEHI to PHN\u2019s attributable income was also tempered somewhat by the dilution resulting from KKR\u2019s P2.52-Billion capital infusion into PEHI in October 2024.<\/p>\n\n\n\n

CMG was challenged by rising costs, unfavorable forex, and increased competition<\/strong><\/p>\n\n\n\n

CMG reported revenues of P14.3-Billion in 2024, surpassing our forecast of P13.9-Billion, which the company attributed to enhanced sales and production capabilities. However, 2024 earnings of P80.6-Million was a big miss vs our forecast of P497.5-Million due to a combination of higher costs and unfavorable forex. This was further compounded by tight competition from smaller and more cost-efficient local players in the rolled steel market, and from importers of cheaper cement.<\/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>