INVESTORS turned positive on Sy-led SM Investments Corp. (SMIC) last week after recording double-digit growth in profit in the first quarter.
Data from the Philippine Stock Exchange showed that P1.27-billion worth of 1.36-million shares of SMIC were traded from May 8 to 12.
SMIC shares inched up by 0.2% to P927 apiece week on week last Friday from P925 on May 5. Since the start of the year, the stock has increased by 3%.
“SM’s subsidiaries performed at par with estimates on their first quarter numbers but its stock price remained undervalued,” Papa Securities Equity Strategist Manny P. Cruz said in a text message last Friday, referring to the company ticker symbol.
Mr. Cruz also said that SMIC’s stock did not benefit from subsidiary BDO Unibank, Inc.’s stock rally.
Ryan Vincent L. Parlade, an equity analyst at The First Resources Management and Securities Corp., said that positive news may have been a driving factor in the stock’s movement last week.
“The stock’s movement may also reflect the country’s GDP (gross domestic product) growth for this quarter and strong household consumption which may benefit its retail and real estate segment,” Mr. Parlade said in an e-mail.
“Decelerating inflation and an impending shift in monetary policy should eliminate concerns on SM’s property and retail businesses,” Mr. Cruz said.
In a press release disclosed to the local bourse on Wednesday, SMIC reported a 33% year-on-year rise in consolidated net income to P17.3 billion in the first quarter from P13 billion in the same period last year.
Among SMIC’s core businesses, the banking segment contributed 47% of net earnings, followed by property at 26%, retail at 17%, and portfolio investments at 10%.
The strong profit growth comes as the conglomerate’s revenues grew by 21% to P138.2 billion from P113.8 billion a year ago.
The double-digit rise was recorded at a time when inflation continued to ease, hitting an eight-month low of 6.6% in April from 7.6% in March, but still faster than the 4.9% in April a year ago, based on the latest data from the Philippine Statistics Authority (PSA).
Meanwhile, the Philippine economy grew by 6.4% year on year in the first quarter, easing from the revised 7.1% growth in the fourth quarter last year and 8% in the same period in 2022. This marked the slowest growth in eight quarters or since the 3.8% contraction in the first quarter of 2021.
The first quarter print settled within the government’s 6-7% target for the year. It was also better than the 6.1% median estimate in a BusinessWorld poll.
Mr. Parlade said SMIC’s net income performance in the first quarter would further improve investor sentiment given its ability to grow amid a high inflationary environment.
He expects SMIC’s bottom line to hit P74.70 billion this year.
“For [this] week, we are currently looking at the P950.00 level as a key resistance level for [SMIC] followed by the P980.00 level. Meanwhile, we are placing our immediate support level at P910.00 to P920.00,” Mr. Parlade said.
Mr. Cruz sees the stock trading between P900 and P945 this week. — T.C.S. Migriño