Accord Capital Equities Corporation: DISCLOSURES UPDATE November 19, 2010 - Friday

ACCORD CAPITAL EQUITIES CORPORATION
GF EC-058B East Tower, PSE Center, Exchange Road, Ortigas Center, Pasig City, PHILIPPINES 1605 (632)687-5071 (trunk)
DISCLOSURES UPDATE November 19, 2010_Friday
CORPORATE NEWS & DEVELOPMENTS:

Last PE 1 2009 Market-to-
STOCK 52-wk range Support Resistance Outlook
Trade (ann 2010) PE range Book
761.50 – Long Term
GLO 816.500 75.00x 8x – 12x 2.4x 799.500 865.000
1,035.00 HOLD/BUY
BHI 0.069 0.055 – 0.125 -0.0012x 206x – 375x 0.4x 0.060 0.072 NEUTRAL
APC 0.800 0.30 – 0.89 -508x 41x - 107x 22.8x 0.770 0.890 SELL
BRN 3.000 2.00 – 4.05 5.6x 30x - 53x 1.5x 2.850 3.180 SELL
GLOBE TELECOM INC. [pse: GLO]. The Company signed a Php4.0 billion term loan facility with MBT to pre-pay existing php3.0
billion debts maturing in 2012 and fund part of its 2011 capex. This is the third loan facility agreement entered into by Globe after
a php2.0 billion with Allied Bank and 5-yr php5 billion with DBP.
In its MRQ, GLO reported flat year-on-year change in net revenues with quarter-on-quarter slipping -3.0%. to php15.887B. Even as
non-service revenue grew 111% yoy, its contribution of only 4.4% of the total failed to impact on the -2.0% slide in core revenue.
With operating expenses rising by 14% in the first 9 months, after tax net income narrowed by -24% to php7.448B. Pre-tax profits
likewise fell by the same degree. The Company cites a general revenue slowdown across the mobile industry resulting from
increased competition, value-for-price promos, as well as seasonal trends in q3. The continued appreciation of the peso against
the US$ contributed to a significant level to the erosion of revenue with 28% of consolidated service revenue tied to the dollar. On
a constant basis, the slippage in service revenue would have only been -1.0%. Operating revenue were flat in the year-on-year
comparative nine month period with the -8% drop in mobile service revenue offset by a strong 36% surge in broadband and fixed
data line business. Moving forward, however, the 10% expansion in its subscriber base to 25.4M as at the end of September 2010,
inclusive of a 16% rise in postpaid costumers, should translate to a consistent revenue stream, even as the sector's revenue profile
shifts more and more toward the broadband and wireless segments.
Annualizing end-Q3 numbers brings a flat forecast for the full-year results. Service revenue may end at slightly below 2009 levels as
higher costs and expenses, plus the squeeze effected by foreign exchange on nearly 30% of its revenue translates to lower EBITDA and
pre-tax margins. Given the 9-month growth pace, net income for the year may fall to less than php10B, or 20% less than last year. If
last year's q4 performance will be a guage, the “flat earnings” agrument is lent further credence considering that period's contribution
to full year revenue was “only” 23% or below the then three quarter average of php15.963B. At this pace, service revenue may reach
up to php59.5B plus a 2% contribution from the non-service segment. 2010 EPS is estimated to end at around php71.00 to php75.00.
Given last year's PE range, this translates to a trading range of php568-php600 on the low side and php850-php900 on the high side.
The 5-yr monthly chart shows the stock breaking its almost
two-year month-on-month downtrend shifting to a
consolidative bias since. Our earlier cited trading range lies well
within this band. It is currently trading at the lower half of the
range, particularly between php760 and php900. The
underlying indicators of STO (10,3), MFI (14) and MACD (12,9,
26) do not present any short- or medium-term suggestions of a
sustained rally but neither does it paint a worrisome future.
Ergo, our generally HOLD proposition. Short-term (daily)
indicators place the issue at the oversold field raising a possible
near-term rebound, following the sell-off which deflated the
issue price by 10% through Friday.
Monthly averages through October are: Volume turnover 1.36M, STDEV 5.93, return -0.02%. Risk/Retrun: n/a
BOULEVARD HOLDINGS, INC. [pse: BHI]. Authorized capital stock to be increased by no more than php2.0 billion at the same
par (php0.10) or 20 billion shares. This translates to an ACS of php2.8 billion divdided into 28 billion shares at php0.10 par value.
Out of such increase, php500 million shall be subscribed to by related parties through a private placement for which minority
shareholders have waived their preemptive rights or the conduct of a public offering. The proceeds of the php500 million private
DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR MADE
AVAILABLE TO OTHERS. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY SECURITY. WHILE THE
INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE AND IT SHOULD NOT BE RELIED UPON
AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF
THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD CAPITAL EQUITIES CORPORATION ON THE CREDIT-WORTHINESS OR
INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.
DAILY Report Page 1 of 4
placement will be used to fund the development of Friday's Boracay, Friday's Boquete, and Friday's Paniman.
Over the last seven (7) years, the Company has amended its AOI to effect changes in its Authorized Capital Stock either as a
means to wipe out deficits or to either acquire properties and/0r enter into joint ventures and partnerships. At present, BHI
concentrates on the hospitality and leisure business via Friday's Holdings, Inc (FHI, 77% direct & indirect equity) which operates
Friday's Boracay Island Beach Resort; Crown One Land, Inc (COLI, 50%) and Friday's Puerto Galera, Inc (FPGI, 45.46%). The latter
is envisioned to replicate the success of the Boracay resort.
Net losses for its fiscal first quarter ending August 31, 2010 narrowed to -php1.766 million from year-ago's -php4.418 million as
costs and expenses remained elevated, erasing a 15% growth in combined services and sales revenue. The downward trend in its
bottomline extends from the -83% drop in its full fiscal year ending May 31, 2010 net income to php4.433 million. The fate of the
Company's finances and operations therefore lies on how fast it will be able to put its projects on stream, tourist arrivals, and a
similar pick-up in domestic tourism. Seaonsality and weather patterns likewise impacts on its core activity.
The technical drawings are more encouraging. Long-term

(monthly charts) posit an encouraging prospect for a price
upswinginitially targetted at the php0.12 mark. Support, from
this perspective is strong at the php0.06 level. But determining
the holding period for such long term proposition remains
touchy and eventually, we have to go back to assumptions for
growth based on its operating fundamentals. For the year to
date, it's volume turnvoer has averaged only 69.09M per
month, with period volume velocity at 9.21% of its outstanding
shares. Over the same 10-month period, it has returned, on
average, -2.4% per month. The mix of readings from the
fundamental and technical fronts form the basis of our
NEUTRAL stance on the counter. While there may be some
technical upside action, this entails taking on more risks that
what we deem to be satisfactory in exchange for potential
short-run return.
APC GROUP, INC. [pse: APC]. Majority-owned subsidiary Aragorn Power & Energy Corporation (APEC) signed two agreements
with Chevron Kalinga, Ltd., wholly-owned by Chevron, the worlds largest producer of geothermal energy. APEC and its partner,
Guidance Management Corporation (GMC), holds the Geothermal Renewable Energy Service Contract over an estimated 26k
hectares in Kalinga Province. The agreements signed includes (1) a Farm Out Agreement granting the APEC/GMC an option for a
40% equity position in the Kalinga Geothermal Project; and (2) a Joint Operating Agreement which charges Chevron with the
exploration, development and operation of the steamfield and
power plant activities. The Kalinga Project is seen to generate
around 100MW in new capacity costing around US$300
million.
Revene for the first nine-months of the year was almost flat,
dipping a-tenth of a percent year-on-year. Third quarter
revenue actually grew to php79 million from php71 million in
q3 2009, mainly contributed by the increase in the service fees
of its manpower services unit, EGSI. Losses however
expanded to php8.365 million from php5.411 million over the
same comparative period.
Technical signals of a near-term sell are developing, raising risks

on a further price upside. The daily charts already locate the
price at overbought levels with momentum possible tapering off
at it approaches resistance at the php0.89 mark. While we are
not discounting a sustained upside considering the issue has returned an average of 10.22% per month to October, the risks, as
measured by standard deviation is too high at 25.79. This is even more evident in the accompanying monthly chart. While the above
development may evenutally provide the impetus for the Company's fundamentals to improve, its impact on the all-important
bottomline numbers will lag. Given present valuations, the counter may even be considered expensive, erasing a value play
proposition. At best, we can keep the issue on the radar as a potential turn-around story. At the moment, however, we are
constrained to place a SELL tag particularly as and if it continues to rise to between the php0.89 resistance and its php1.00 par.
A. BROWN COMPANY, INC [pse: BRN] The acquisition of 100% of DMCI Concepcion Power Corporation by BRN subsidiary,
Palm Thermal Power Consolidated Holdings, Inc (PTCH) is in line with its venture into the power industry in light of government's
thrust to bring electricity to remote barangays and to contribute to meeting the increased demand for sufficient and stable power
supply. It has agreed to a consideration amounting to php9.20 per share or php23 million for 2.5 million shares of DCPC. The
transaction, seen to be completed this month, will be financed by borrowings. DCPC was incorporated to operate power
generating plants in Concepcion, Iloilo. On the other hand, the purchased land coveing 30 hectare by another subsidiary, Panay
Consolidated Land Holdings, Corp (PCLH) is intended as a site for its coal-fired power plant. The php57 million price tag,
representing a less than 1% premium on the property's book value, will likewise be financed by borrowings.
Attributable net income to equity holders of the parent increased five-fold year-on-year to php470.9 million through the first nine
months of 2010 on higher revenue, lower expense plus an income tax benefit. This despite slower results in q3 2010, highlighted
by losses amounting to php10.681 million. Revenue was pushed by dividend income (php385m vs. php0.00) and AFS gains
amounting to php155.2 million offsetting declines in financial income and rental income. Nearly 60% of the Company's revenue is
generated from real estate operations, with the growing venture into the palm industry sector accounting for 30%. In addition to
its food use, palm oil is gaining importance in its non-food application, particularly as a source for biofuels.
AVERAGE volume turnover has been rising month-on-month

from 8.69 million at the end of January when the share price
slipped -2.7% to 11.79 million as of end-October, with the issue
price even lower at >-20% ytd. Average return per month of the
period is -2.51% although volatility risk has narrowed to 7.0
standard deviation. Thus, although the long-term bias remains
negative, there is an observable easing of the downside pressure
to q1 levels when the issue treaded the php3.35-4.05 range.
STO over the same monthly chart registers a contrary bias and
suggestion. Daily MACD shows a cross-over the signal line,
supportive of the STO propostion of a possible near-term price
upside. However, with the stock continuing to trade wihtin the
narrow php2.95 to 3.05 range, and in the face of narrowing
price-return volatility, there may not be enough room for a quick
trade until and unless it breaks outside of either side of the
range. Ceterib paribus, we are inclined to posit a SELL
notwithstanding the contrary suggestion drawn by STO.
OTHERS:
BANK OF THE PHILIPPINE ISLANDS [pse: BPI]. The Bangko Sentral ng Pilipinas has approved the declaration of cash dividends
amounting to php0.90 per common share. Ex-cash date is on December 1, 2010 and will be payable on December 19, 2010.
Monthly averages through October are: Volume turnover: 38.8M, StDev 5.56 , return: 2.15% Risk/Return 2.59 Support: php54.00,
resistance 61.50. BUY
TRANS-ASIA OIL AND ENERGY DEVELOPMENT CORPORATION [pse: TA]. GPC Investments SA, formerly Vitol GPC
Invesments SA, has decided not to exercise its option to acquire interest in SC No. 6 Block A in which TA holds a 7.78%
participating interest. The option was granted to GPC under the Amending Agreement to the October 2009 Farm-In Agreement.
Monthly averages through October are: Volume turnover: 19.45M, StDev 7.45 , return: 0.07% Risk/Return 106.4, Support php1.06,
Resistance php1.16. Trading BUY
SAN MIGUEL CORPORATION [pse: SMC]. The diversifying conglomerate will attempt to increase its foothold in the power
industry confirming its reported interest in bidding for the $1.2 billion Batangas-Manila (BatMan 1) natural gas pipelline. It will also
be participating in infrastructure, power and tourism projects the government may bid out. In another front, it has also confirmed
rumors and reports of a $3 billion secondary offering with a possible price range of between php150 to php200. Monthly averages
through October are: Volume turnover: 3.55M, StDev 6.26 , return: 1.99% Risk/return 3.14, Support php105.00, Resistance php119.50
HOLD
PETRON CORPORATION [pse: PCOR]. The BSP has approved the US$100 million increase in the size of its bond float. The
peso-denominated security will be used to cover the Company's importation of crude oil and finished products. The budget for
such importations have been doubled from US$100 million to US$200 million, justifying the increase in the issue size. Monthly
averages through October are: Volume turnover: 18.9M, StDev 5.61 , return: 2.95% Risk/Return 1.90, Support : php6.80, Resistance
php7.40 HOLD

Accord Capital Equities Corporation: DISCLOSURES UPDATE November 19, 2010 - Friday

Diunggah oleh

Informasi Dokumen

Deskripsi Asli:

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Accord Capital Equities Corporation: DISCLOSURES UPDATE November 19, 2010 - Friday

Diunggah oleh

Hak Cipta:

Format Tersedia

ACCORD CAPITAL EQUITIES CORPORATION

CORPORATE NEWS & DEVELOPMENTS:

The technical drawings are more encouraging. Long-term

Technical signals of a near-term sell are developing, raising risks

AVERAGE volume turnover has been rising month-on-month

Anda mungkin juga menyukai