Market Talk (GTCAP, ABSP, AP)

Consumer durables: Vehicle sales jumps 19% in January. The auto industry is off to a strong start as the Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) reported motor vehicle sales jumped 19% YoY to 18,662 units in January. CAMPI sees this as an early indication that industry sales will rise further, as January has traditionally been a slow month. Toyota Motor Philippines Inc, the auto subsidiary of GT Capital Holdings Inc (GTCAP – BUY) once again leads all brands with market share of 46.67%, or 8,709 vehicle sales. For 2015 CAMPI is projecting sales of 272,000 units, to be driven by new product launches and promotion packages. Combined with sales from the Association of Vehicle Importers and Distributors, total industry projection for 2015 is 310,000 units.

Media: ABS-CBN officially launches digital TV service. Top officials of ABS-CBN Corp (ABSP – Buy) yesterday held a ceremonial switch-on event for ABS-CBN TVplus, the company’s free-to-air digital terrestrial TV (DTT) service. This is another pioneering event as the company is the first to offer DTT service in the Philippines. The areas to be covered include Metro Manila, Rizal, Cavite, Laguna, Bulacan, Pampanga, Nueva Ecija, Tarlac, Pangasinan, Benguet, and Metro Cebu. ABS-CBN will also sell digital boxes (to be made available in major retailers) that support DTT at PHP2,500 each. ABS-CBN is targeting for 1m households to avail of the service this year. We believe this to be a positive development. Through DTT, ABS-CBN hopes to address it poor signal quality in certain areas in Metro Manila.

Power: PEMC imposes penalty on Aboitiz Power’s Therma Mobile. In connection to the investigation conducted by the Philippine Eletricity Market Corp (PEMC) with regard to the spike in prices at the Wholesale Electricity Spot Market (WESM) in Nov.-Dec. 2013, PEMC alleges that Therma Mobile (owned by Aboitiz Power Corp., AP-BUY) withheld capacity during this period and violated the “Must Offer” rule and imposed financial penalties amounting to P234.9m on Therma Mobile. However, Therma Mobile is contesting this allegation imposition of the penalty, which is equal to 1% of our 2015 net income forecast for Aboitiz Power.


-maybank atr