TUE 19 FEB 2019

Top Story:

CIC: Earnings rebound in 4Q18; full-year income trails estimates

Other News: (AS OF FEB 15, 2019)

INDICES
JGS, SMC, and FB: JGS, SMC, and FB enters FTSE index Close Points % YTD%
MRSGI: MRSGI to develop a mixed-use project in Samar PSEi 7,910.58 1.69 0.02 5.95

Economy: December cash remittances expands 3.9% y/y; above consensus forecast All Shares 4,841.60 18.28 0.38 7.17
Financials 1,787.84 1.45 0.08 0.45
GTCAP: Toyota Philippines targets 5% sales growth for 2019
Holding Firms 7,939.78 37.85 0.48 8.14
Economy: Rice tariffication bill signed into law Industrial 11,427.11 -30.18 -0.26 4.34
Mining & Oil 8,458.31 -34.60 -0.41 3.14
Market Summary: Property 4,002.94 -33.76 -0.84 10.34
Services 1,578.94 10.40 0.66 9.44

The PSEi ended flat yesterday, underperforming the regional markets which rallied amidst Dow Jones 25,883.25 443.86 1.74 10.96
positive US-China trade sentiment after US President Trump said that trade talks with China was S&P 500 2,775.60 29.87 1.09 10.72
very productive. Note that major Asian indices ended higher such as Japan’s Nikkei 225 (+1.82%), Nasdaq 7,472.41 45.45 0.61 12.62

China’s Shanghai SE Composite (+2.68%), Hong Kong’s Hang Seng (+1.60%), and South Korea’s
KOSPI (+0.67%). INDEX GAINERS
Ticker Company Price %
JGS JG Summit Hldgs Inc 67.10 7.79
The benchmark index inched up by just 1.69 points or 0.02% to close at 7,910.58. The top gainers
SMC San Miguel Corp 174.50 7.06
were JGS (+7.79%), SMC (+7.06%), ICT (+2.61%), RLC (+2.96%), and AP (+2.65%). SMC and JGS RLC Robinsons Land Corp 22.60 2.96
rose after they were added to the large-cap index of the Financial Times Stock Exchange 100 AP Aboitiz Power Corp 34.90 2.65
Index. However, these were mostly offset by decliners such as SMPH (-2.92%), AEV (-3.71%), AC ICT Int'l Container Term 118.00 2.61

(-1.66%), JFC (-1.45%), and URC (-0.68%).

INDEX LOSERS
Value turnover declined to Php11.1Bil from Php16.4Bil in the previous session. Meanwhile, Ticker Company Price %
foreigners turned net buyers, accumulating Php549Mil worth of shares. This brought the year- AEV Aboitiz Equity Ventures 63.55 -3.71
SMPH SM Prime Hldgs Inc 38.25 -2.92
to-date net foreign buying to Php22.9Bil.
LTG LT Group Inc 15.00 -1.96
SCC Semirara Mining 22.60 -1.95
DMC DMCI Hldgs Inc 12.28 -1.76

TOP 5 MOST ACTIVE STOCKS

Ticker Company Turnover
JGS JG Summit Hldgs Inc 543,967,700
SMC San Miguel Corp 416,643,800
BDO BDO Unibank Inc 401,286,600
ALI Ayala Land Inc 376,414,100
ICT Int'l Container Term 376,035,100

Disclaimer: All content provided in COL Reports are meant to be read in the COL Financial website. Accuracy and completeness of content cannot be guaranteed if reports are viewed outside of
the COL Financial website as these may be subject to tampering or unauthorized alterations.
 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 19 FEB 2019

Top Story:

JUSTIN RICHMOND CHENG
RESEARCH ANALYST
CONCEPCION INDUSTRIAL CORP.
BUY
PHP43.00
CIC: Earnings rebound in 4Q18; full-year income trails
estimates
4Q18 net income grows 4.7% y/y; full-year income trails estimates. In a press release by
CIC, it reported that its net income to common shareholders stood at Php240Mil in 4Q18 and
Php913Mil in FY18. 4Q18 net income grew 4.7% y/y, narrowing the decline of CIC’s full-year
earnings to 6.8% from 10.5% as of the nine-months. However, despite the improvement in
earnings during the fourth quarter, full-year results still trailed COL and consensus estimates at
95.5% and 89.2% of full-year forecasts, respectively. The underperformance was due to lower-
than-expected margins as revenues were in line with estimates.

Revenues for CIC in the fourth quarter grew 11.3% y/y to Php3.9Bil. This brought FY18 revenues
2.2% higher y/y to Php14.2Bil. This is in line with COL and consensus estimates at 99.6% and
100.4% of full-year estimates, respectively. Revenue growth for the quarter shows a recovery in
sales coming from a huge decline of 17.0% in 3Q18. Recall that CIC’s sales for the third quarter
were affected by several weather disturbances, which led to weaker demand.

Exhibit 1: Results Summary

% of Full year Forecast
In PhpMil 4Q17 4Q18 % Change FY17 FY18 % Change
COL Consensus
Revenues 3,505 3,900 11.3 13,900 14,200 2.2 99.6 100.4
Net income 229 240 4.7 980 913 -6.8 95.5 89.2
Margin (%) 6.5 6.1 - 7.1 6.4 - - -
Source: CIC, Bloomberg

We will release a more detailed report after CIC’s results briefing.

Other News:

RESEARCH ANALYSTS JGS, SMC, and FB: JGS, SMC, and FB enters FTSE index
ANDY DELA CRUZ
JOHN MARTIN LUCIANO
According to news reports, JGS, SMC, and FB were added to the FTSE Global Equity Index, FTSE
FRANCES ROLFA NICOLAS
All World, and FTSE All-Cap indices following its latest semi-annual review. This will take effect
JUSTIN RICHMOND CHENG
on March 18. (Source: Inquirer)
ADRIAN ALEXANDER YU

COL Financial Group, Inc. 2

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 19 FEB 2019

MRSGI: MRSGI to develop a mixed-use project in Samar

MRSGI has entered into a joint venture agreement with the Province of Samar for the
development of a mixed-use project in the province of Samar. The project will be worth around
Php473Mil. Under the agreement, MRSGI will be shelling out the Php473Mil capital required
for the construction, and the province of Samar will contribute the 22,000 sqm parcel of land
located in Catbalogan City. MRSGI will then develop and construct a department store with
a supermarket, a convention center, a government center, a transport terminal, and a hotel.

The construction period will span between 6 to 24 months after the property has been turned
over by the government. Upon completion of the construction, MRSGI will turn over the
convention center, the government center, and the terminal to the province with all revenues
belonging to the government. Meanwhile, both MRSGI and the government will share in
the monthly gross revenues and gross rent from the operation of the department store and
supermarket. Finally, MRSGI will also get a 20% share from the hotel operator’s rental payments,
while 80% will go to the province of Samar. Note that after 30 years, the ownership of the
department store and supermarket will be turned over to the province of Samar. (Source: MRSGI)

Economy: December cash remittances expands 3.9% y/y; above

consensus forecast

Cash remittances in December 2018 expanded 3.9% y/y to US$2.8Bil. This is faster than
consensus forecast of 2.5%. This brought the full year cash remittances to US$28.9Bil, up 3.1%
y/y. Broken down, cash remittances from land-based and sea-based workers grew by 2.8%
y/y and 4.6% y/y, respectively. The BSP further noted that cash remittances in 2018 remained
strong despite political uncertainties across the globe. This is seen in Asia, the Americas, and
Europe, which rose by 12.3%, 9.7%, and 7.7%, respectively. These managed to offset the 15.3%
decline in remittances from the Middle East, which was partially due to the government’s
repatriation program. (Source: BSP, Bloomberg)

GTCAP: Toyota Philippines targets 5% sales growth for 2019

Toyota Motor Philippines (TMP) expects car sales to recover in 2019, forecasting a 5% growth
after an industry-wide slump in 2018. According to TMP President Satoru Suzuki, inflation
is one of the factors that might impact customer’s decision to buy a vehicle, but hopes that
customers get accustomed to the inflationary pressure together with their income growth
and decide to buy cars. Note that vehicle sales dropped by 16% to 357,410 units in 2018 due to
the imposition of automobile excise taxes and higher inflation. Despite the drop, TMP still led
industry sales with 153,004 vehicles sold in 2018, accounting for 42.8% of the total.
(Source: BusinessWorld)

COL Financial Group, Inc. 3

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 19 FEB 2019

Economy: Rice tariffication bill signed into law

President Duterte signed the rice tariffication bill into law. The bill aims to liberalize the import
process for rice while taking away the role in importing of the National Food Authority. The
measure will restore minimum access volume to the 2012 level of 350,000 metric tons and
impose a tariff of 35% on grain shipped from Southeast Asia. This will raise revenue for the
government and will also fund a rice industry competitiveness fund worth Php10.0 Bil under
the 2019 General Appropriations Bill. (source: BusinessWorld)

COL Financial Group, Inc. 4

 CALENDAR OF EVENTS DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 19 FEB 2019 FEBRUARY

SUN MON TUE WED THU FRI SAT

1 1 1 2 3 1 2

3 4 5 6 7 8 9

10 11 12 13 14 15 16

17 18 19 20 21 22 23

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1 31 6 7 8 9 10

K E Y E V ENTS HOL IDAY

FE B 5 FE B 1 2 FEB 26
HOLI DAY: CH INESE N E W YEA R T F C : A N N UA L SH A R E H O L D E R S M E E T I N G R C B : A N N UA L S H A R E H O LD ER S MEE TING

FE B 6 FE B 1 3 FEB 28
UB P: EX-DATE PH P1.90 C A S H D IV IDEND JO H: A N N UA L S H A R E H O L D E R S M E E T I N G I S : A N N UA L SH A R E H O L D ER S MEE TING
V MC: ANNUAL SH ARE H OLDER S M EE T ING
FE B 2 5
FE B 8 HO LIDAY: E D S A P E O PL E P O W E R R E V O LU T I O N
MED: ANNUAL SH ARE HO LD ER S M EE T ING A NNIV ER SA RY

COL Financial Group, Inc. 5

 DAILY NOTES I PHILIPPINE EQUITY RESEARCH

TUE 19 FEB 2019

IMPORTANT RATING DEFINITIONS

BUY
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
12 months.

HOLD
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 in line or underperform in the market in the next six to twelve
months.

SELL
We dislike both the valuations and fundamentals of stocks with a SELL rating. We expect the share price to underperform in the next six to12 months.

IMPORTANT DISCLAIMER
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 said information may be
incomplete or condensed. All opinions and estimates constitute the judgment of COL’s Equity Research Department as of the date of the report and are subject to change
without prior 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 and/
or its employees not involved in the preparation of this report may have investments in securities of derivatives of the companies mentioned in this report and may trade
them in ways different from those discussed in this report.

COL RESEARCH TEAM

APRIL LYNN TAN, CFA

VP & HEAD OF RESEARCH
april.tan@colfinancial.com

CHARLES WILLIAM ANG, CFA GEORGE CHING RICHARD LAÑEDA, CFA

DEPUTY HEAD OF RESEARCH SENIOR RESEARCH MANAGER SENIOR RESEARCH MANAGER
charles.ang@colfinancial.com george.ching@colfinancial.com richard.laneda@colfinancial.com

ANDY DELA CRUZ JOHN MARTIN LUCIANO FRANCES ROLFA NICOLAS

SENIOR RESEARCH ANALYST SENIOR RESEARCH ANALYST RESEARCH ANALYST
andy.delacruz@colfinancial.com john.luciano@colfinancial.com rolfa.nicolas@colfinancial.com

JUSTIN RICHMOND CHENG ADRIAN ALEXANDER YU

RESEARCH ANALYST RESEARCH ANALYST
justin.cheng@colfinancial.com adrian.yu@colfinancial.com

COL FINANCIAL GROUP, INC.

2402-D EAST TOWER, PHILIPPINE STOCK EXCHANGE CENTRE,
EXCHANGE ROAD, ORTIGAS CENTER, PASIG CITY
PHILIPPINES 1605
TEL NO. +632 636-5411
FAX NO. +632 635-4632
WEBSITE: www.colfinancial.com

COL Financial Group, Inc. 6