MONDAY, 18 APRIL 2016

Double Dragon Properties Group:

FY15 net income of Php559Mil, flat y/y

Ends FY15 with net income of Php559Mil, flat y/y. DD reported FY15 net income to equity
shareholders of Php559Mil, up by just 0.6% compared to the FY14 income of Php556Mil. The
full-year performance implies that DD sustained a net loss to equity shareholders of Php147Mil
in 4Q15, a reversal of FY14s net profits of Php225Mil. Revenues for the year were up 12.8% to
Php1.9Bil. However, costs and expenses increased at a much faster pace of 14.2%.
(see exhibit 1)

Revenues up 12.8% on non-core items. DDs revenues increased by 12.8% to Php1.9Bil

in FY15. However, FY14 and FY15 revenues included an unrealized gain from change in the
fair value of its investment property amounting to Php456Mil and Php811Mil, respectively.
Excluding such amounts, FY15 revenues of Php1.1Bil were lower by 10.9% compared to FY14s
revenues of Php1.3Bil. Real estate sales, which comprised the bulk of revenues, declined by
40% to Php641Mil. Real estate sales comprise mostly of interim projects such as the SkySuites
Tower and W.H. Taft Residences. Meanwhile, rental income contribution increased significantly
to Php117Mil from just Php6Mil in FY14. This is attributable to the 5 CityMalls which were
operational during the year as well as other commercial leasing developments.

Costs and expenses up 14.2% on higher GAEX, interest expense. DDs costs and expenses
for the year increased by 14.2% to Php1Bil. The jump came on the back of higher GAEX and
interest expense. GAEX for the year more than doubled to Php429Mil from Php201Mil due
to higher personnel costs, business taxes, professional services acquired, depreciation and
leases. On the other hand, interest expense was up three-fold to Php114Mil from Php38Mil.
This was due to a higher amount of loans which were used to fund the companys expansion
plans. Short and long-term notes payables almost doubled to Php15.4Bil as of end FY15 from
Php8.4Bil as of end FY14.
CityMalls sites 41% secured. According to DD, it has already secured 41 CityMall sites as of
end-2015 out of its 2020 target of 100 sites. Out of the secured sites, five are already operational
while 25 are currently under construction and will be operational within the next 12 months.

FORECAST SUMMARY

RELATIVE VALUE
P/E(X)
P/BV(X)
ROE (%)
Dividend Yield (%)
*Source: DD,COL est imat es

DD
N/A
37.30
N/A

2011
119
6
5.1
4
3.6
0.14

265.00
39.47
0.00

190
180
170
160
150
140
130
120
110
100
90
80
70
18-Jan-16

18-Feb-16
DD

18-Mar-16

18-Apr-16

PSEi

ABSOLUTE PERFORMANCE
DD
PSEi

1M
-4.24
-0.46

3M
70.32
14.80

YTD
52.87
4.62

MARKET DATA

There is currently no consensus rating on DD.

Year to Dec. 31
Revenues
% change y/y
EBIT
% change y/y
EBIT Margin (%)
Net Profit
% change y/y
NPM (%)
EPS (in Php)
% change y/y

N/A

Rating
Ticker
Fair Value (Php)
Current Price
Upside (%)

SHARE PRICE MOVEMENT

SHARE DATA

2012
608
120
1,856.1
19.7
92
2,029.8
15.2
2.05
-

2013
662
8.8
161
34.1
24.3
107
15.6
16.1
0.86
-57.9

2014
1,711
158.4
811
404.5
47.4
556
421.2
32.5
0.28
-67.2

2015
1,929
12.8
887
9.4
46.0
559
0.6
29.0
0.25
-11.5

18.10
3.53
36.84
0.00

42.98
7.45
20.08
4.18

130.86
10.56
39.24
0.00

147.87
9.57
22.39
0.00

Market Cap
Outstanding Shares
52 Wk Range
3Mo Ave Daily T/O

83,168.93Mil
2,229.73Mil
8.70 - 39.85
58.21Mil

Meredith Hazel Cua

meredith.cua@colfinancial.com

PHILIPPINE EQUITY RESEARCH

Exhibit 1: Results Summary

in PhpMil
Revenues
Net Income

4Q14
583
225

4Q15
205
(147)

Net Income Margin %)

38.6

-71.6

% Change
-64.7
-165.5

FY14
1,711
556

FY15
1,929
559

32.5

29.0

% Change
12.8
0.6

Source: DD, COL estimates

MONDAY, 18 APRIL 2016

DD

EARNINGS ANALYSIS

page 2

PHILIPPINE EQUITY RESEARCH

Investment Rating Definitions

BUY

HOLD

SELL

Stocks that have a BUY rating have attractive

fundamentals and valuations, based on
our analysis. We expect the share price
to outperform the market in the next six to
twelve months.

Stocks that have a HOLD rating have either

1.) attractive fundamentals but expensive
valuations; 2.) attractive valuations but
near term earnings outlook might be poor
or vulnerable to numerous risks. Given the
said factors, the share price of the stock may
perform merely inline or underperform the
market in the next six to twelve months.

We dislike both the valuations and

fundamentals of stocks with a SELL rating.
We expect the share price to underperform in
the next six to twelve months.

Important Disclaimers
Securities recommended, offered or sold by COL Financial Group, Inc.are subject to investment risks, including the possible loss of the principal amount
invested. Although information has been obtained from and is based upon sources we believe to be reliable, we do not guarantee its accuracy and it may
be incomplete or condensed. All opinions and estimates constitute the judgment of COLs Equity Research Department as of the date of the report and are
subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a
security. COL Financial ans/or its employees not involved in the preparation of this report may have investments in securities or derivatives of securities of
securities of the companies mentioned in this report, and may trade them in ways different from those discussed in this report.

2401-B East Tower, Philippine Stock Exchange Centre, Exchange Road, Ortigas Center, Pasig City, 1605 Philippines
Tel: +632 636-5411

MONDAY, 18 APRIL 2016

DD

Fax: +632 635-4632

EARNINGS ANALYSIS

Website: http://www.colfinancial.com

page 3