Conglomerates: ANS 1Q profit surge on trading gains. A. Soriano Corp’s (ANS) 1Q14 profits surprise, jumping 94% YoY to PHP1.09b, accounting for 85% of our full-year estimate. Trading gains, mostly on sale of investments, reached PHP987m, up 120%. Maintain HOLD with increased TP to PHP7.76 factoring in higher end-1Q14 investment portfolio balance. Details on page 3.
Mining: SCC receives summons on civil complaint by contractor. Semirara Mining Corp (SCC – Under review) disclosed yesterday it received a summons based on a civil complaint filed by Bauer Foundation Philippines Inc against the company and two of its officers with respect to the drill and grout of 122 holes at 150 meters each for stabilization measures along the Panian fault in the Panian pit. Damages requested is PHP507.1m broken down into PHP7m actual damage, PHP500m exemplary damages and PHP100,000 on cost of litigation. According to SCC the outlook is favorable as Bauer was not able to deliver on deadline and forced SCC to complete the project themselves. We expect a long civil case which will be reflected in a contingent liability of PHP507m. An adverse decision would be appealed to lower exemplary damages as the PHP500m demanded is inappropriate to the actual damage claimed of PHP7m.
Property: ELI finalized deal on Pasig property. Empire East Land Holdings Inc (ELI-Not rated), a unit of Megaworld Corp (MEG-BUY), is finalizing a deal to take over a 23-hectare abandoned factory in Pasig City. ELI plans to develop this property as a mixed-use development to be called Empire East City as part of its PHP25b planned expansion. In addition, ELI’s president Anthony Charlemagne Yu said the company’s revenues could grow 10-20% and net profits by 15-30% this year.
Consumer durables: Vehicle sales up in May. Vehicle sales in May jumped 23.6% YoY and 8.3% QoQ to 19,598 units. Passenger car sales climbed 44.3% to 7,507 units while commercial vehicles went up 13.4% to 12,091 units. In 5M13, total vehicle sales expanded 22.4% to 89,335 units. Passenger cars rose 35.3% to 32,331 units while commercial vehicles grew 16.1% to 57,004 units. Toyota Motor Philippines, a subsidiary of GT Capital Holdings (GTCAP – HOLD), remains the market leader with 44.4% market share on sales of 40,062 units. The Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) sold 181,283 units in 2013 while the Association of Vehicle Importers and Distributors sold 31,999 units, leading to combined auto sales of 211,558 units, higher than the 210,000 target. This year CAMPI is looking at industry sales of 230,000 units.
- ATR
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