Century Properties [CPG 0.36 1.4%] [link] is incorporating a new subsidiary, Century PHirst Corporation (CPHC), to ply the “socialized, economic, and mid-income” residential markets with a mixed-use format to support commercial, retail, and “institutional” demands. CPHC has single attached and detached housing developments that are just in the process of being launched and sold in Batangas and Laguna, and a mixed-use township in Bataan that will go on sale later next month.
MB BOTTOM-LINE
CPG is just following the money, which (for now) appears to be in the “first home buyer market” that has been proven to be remarkably resilient through the twin pandemics of COVID-19 and inflation. CPG may not be my pick when it comes to its traditional approach to the high-income residential market, but (IMHO) this pivot shows that the management group is not so married to the image of being a mid/high-end developer that it cannot grab some of the sweet low hanging fruits available in the other segments of the market. I hate the “PHirst” name, but I like the thinking that the initiative implies.
AgriNurture [ANI 7.18 1.6%] [link] Chairman Antonio Tiu outlined an intention to develop a P2.6 billion corn plantation in Davao del Sur that could, if operational, produce 200,000 metric tons of corn per year. Mr. Tiu said ANI “intends” to get annual production up to 1,000,000 metric tons of corn per year by 2026. ANI received a P2-billion long-term loan from the Development Bank of the Philippines to fund the project, with P600 million coming from ANI.
MB Quick Take
There are a ton of forward looking statements here that rely on a huge number of variables and assumptions that are likely to shift in ways that are both predictable and surprising. That’s true of every forward looking statement! But I mention it here because it’s important to measure a press hit like this against the actual things that a company has done, not the cool things they could do. Here, the P2-billion long-term loan is actually a fairly positive sign that this is more than just a cheap press hit, but “agri” is the new “solar” (which was the new “crypto”) in terms of being something that can be said to reliably draw attention to plans and dress them in a cloak of tantalizing plausibility and "what if!" valuations.
2GO Group [2GO 7.00 2.9%] [link] teased its FY22 net income of P312 million, which it referred to as a “turnaround profit” after years of net losses. 2GO said that the economic reopening caused revenues to increase 25% y/y to P19.3 billion, with shipping revenues growing by 67%. Passenger travel revenues grew 217%, sea freight revenues grew 48%, and logistics grew 30%. 2GO specifically mentioned that the growth in its logistics segment was driven by cold chain service revenue.
MB Quick Take
Is it a coincidence that 2GO was finally able to turn a profit in the first full year of operations since Dennis Uy sold his stake in the company to SM Investments [SM 900.00 1.1%]? Probably? Mostly? Mr. Uy didn’t have a controlling stake in 2GO to begin with, but it’s hard to deny Mr. Uy’s track record of running profitable businesses is not that great, so maybe there’s a little tiny nugget of truth in the joke. It’s like Mr. Uy broke up with 2GO, but now Mr. Uy is living month-to-month in a rundown bachelor pad, selling his Playstation to make rent, while 2GO is posting all over Instagram with its new partner, fit, eating well, and living life to its fullest. Jokes aside, i want to get a good look at the FY22 financials to see if this stretch of profitability is temporary or a sign of things to come.
--