1.15.12 MEG – Megaworld Corporation

“CB Richard Ellis (CBRE) Philippines named Megaworld as the country’s TOP RESIDENTIAL CONDOMINIUM DEVELOPER after launching (together with its subsidiaries, Empire East and Suntrust Properties) more than 40,000 condominium units between 2000 and 2011, a feat that enabled the company to corner 16 percent share of the market, a 4 percent lead over its closest competitor.

In fact, the overall volume of units launched by Megaworld in the same 12-year period represents an estimated total aggregate saleable area of about 1.9 million square meters—a 16.5-percent market share that is 5 percent ahead of the company’s closest competitor.

 

Largest builder

A few weeks earlier another independent property adviser, Colliers International, came out with its study citing Megaworld as the country’s LARGEST BUILDER OF RESIDENTIAL CONDOMINIUMS in terms of units completed in 2010 and those that will be completed between 2011 and 2016.

With this achievement, Megaworld is able to capture 18 percent of the market, a 4-percent advantage over its closest competitor.”

Source: Business Inquirer

 

Financial Highlights

(in Billions)

 

9M11 – Actual data for the nine months ended September 2011
11A – Annualized 2011 data. (9M11/3 x 4). Estimate

 

 

Consolidated Revenues (CR)
9M11 CR of 22.96B already surpassed the previous years revenue of 20.54B,
if annualized, there will be an increase of 49% from previous year’s CR.
[(30.61-20.54)/20.54]

Real Estate Revenues(RER)
RER for 9M11 of 15.75B is now greater than the full year 2011’s RER of
15.40B. The estimate points to a possible 36.4% increase from previous
year. [(21-15.4)/15.4]
RER are revenues derived from its core business. Mainly composed of Real
Estate sales and Rental Income.

 

 

 

EBITDA – Earnings before Interest, tax, depreciation and amortization
There’s a possibility of 58% increase in EBITDA from 7.65B in 2010 to
12.08B in 2011.

Net Income
As of Sept 2011, MEG already cornered 6.70B NI as compared only to 5.09B in
2010. The annualized NI of 8.93 will reflect a possible 75% gain from 2010.

 

 

A huge increase in Net Income Margin, a measure of profitability, simply
shows that a company has better control over its cost in 2011 as compared
to prior years.

 

 

Source: PER: PSE,Firstmetro and Bloomberg for FLI, SMDC & SMPH
BVPS & PBV: BPI Asset Mgt

TTM : Trailing twelve months | 2011
2012F & 2013F are estimates/projection of BPI Asset Mgt.

Sorry, I forgot to draw the legend.lol.. From the Top: ALI, SMPH, SMDC, RLC, MEG & FLI

 

PER – Price per Earnings Ratio
MEG, considering it’s a blue chip, is the cheapest among the property
stocks presented above. With only PER of 6.28, we can say that MEG is
undervalued as compared to others with almost all of their PERs are at 13
and above.

If we use BPI’s 2012F(estimate) EPS 0.26, (1.86/7.29)
at PER of 10, the price should be 2.60. In comparison, PBV on 2012F is 2.73
That’s a possible 39.7% from its current price 1.86 to 2.60

Try to compute using TTM. You should arrive at 2.96.

PBV – Price per book value
MEG is way below its book value. Book value is the Net Asset of the company. All companies mentioned above are already above their Book Value except MEG & FLI. To reach the TTM book value of 2.36, MEG should increase 27% from its latest price of 1.86.

 

Technical Analysis

2Years – weekly chart

 

Property sector was laggard in 2011. MEG consolidated in a downtrend channel for more than a year.
It bounced at the uptrend support and finally created a higher low. It is now attempting to break the downtrend resistance with the support of a huge volume, not overbought RSI and a MACD signal.

 

Caveat!!!

 

 

2 thoughts on “1.15.12 MEG – Megaworld Corporation

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