notes: MEG/MEGAWORLD CORP. (16 MAY 2018)

COL FINANCIAL EARNINGS ANAYSIS (16 MAY 2018)

"Maintain BUY with FV estimate of Php6.15. We maintain a BUY rating on MEG with a fair value estimate of Php6.15. Our fair value estimate is based on a 25% discount to our NAV estimate of Php8.21. We believe that at MEG’s current price of Php4.65, valuations are very attractive. Aside from trading at a significant discount to NAV, at Php4.65, MEG is trading at only 10.1X FY18E P/E, below the industry average 2018 P/E of 16.3X and industry median of 11.69X."


*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.