{"id":332647,"date":"2025-05-29T01:19:05","date_gmt":"2025-05-28T17:19:05","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=332647"},"modified":"2025-05-29T01:21:17","modified_gmt":"2025-05-28T17:21:17","slug":"stock-in-focus-wilcon-depot-wlcon-29-may-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-wilcon-depot-wlcon-29-may-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: Wilcon Depot (WLCON) – 29 May 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>WLCON<\/td><\/tr>
Company Name<\/strong><\/td>Wilcon Depot Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>29 May 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 9.61<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

While we note that there is now substantial upside to consensus Target Price of P9.61\/share, we reiterate our HOLD rating on WLCON as topline growth could be dragged by elevated operational costs in the following quarters.<\/p>\n\n\n\n

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

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

Approved building permits breaks losing streak<\/strong><\/p>\n\n\n\n

The number of approved building permits started slow in 2025 with January seeing a -10.5% year-on-year (YoY) decline, which improved in the month of February -0.7% YoY. Moving into March, we finally saw positive YoY growth of +3.4% to 14,973 from 14,477 in March 2024. There is a certain seasonality to the data, with February to March usually seeing a pick-up in construction activity as the sunny weather allows developers to accelerate projects that were delayed by unsuitable weather conditions from previous months.<\/p>\n\n\n\n

WLCON targets non-residential<\/strong><\/p>\n\n\n\n

During the 1Q 2025 analyst briefing, WLCON signaled its intention to put in more effort into targeting nonresidential demand amidst the slow pick-up in residential building permits. We now see the wisdom in the move with nonresidential outpacing residential building permits in March 2025 with 3,329 permits granted (+2.1% YoY) vs 3,262 the previous year. Moreover, nonresi substantially outpaced resi growth by 3.6ppts on average in 2024, which further supports WLCON\u2019s strategy to shift its target and focus on nonresidential.<\/p>\n\n\n\n

Operational performance overshadows improving market environment<\/strong><\/p>\n\n\n\n

This is a great development for the industry as building permits finally broke its two-month losing streak which could potentially translate to more customers. However, WLCON\u2019s 1Q25 results sets a cloudy outlook on future performance as it is still exposed to margin erosion. Furthermore, we are still expecting higher operating expenses from higher lease-related expenses as it continues to aggressively expand its store footprint this year.<\/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>