VITRO REIT IPO pushed to 2027

From AB Capital's The Opening Bell: Three Moves

Event

PLDT deferred the planned VITRO REIT IPO to 2027, citing market conditions and higher interest rates. The P24.2 billion offering was originally targeted for an Oct. 12 listing, with proceeds earmarked for ePLDT debt reduction and REIT reinvestment requirements.

View

We see the delay as valuation-driven rather than a change in PLDT's monetization plans. Given the current market backdrop, we would rather see PLDT defer the IPO than force a weakly valued transaction, particularly as higher rates raise the yield investors would demand from REITs. However, this also means the planned debt reduction is pushed out. See our report for our view on the deal.

Catalyst

A more supportive rate environment is likely needed for the IPO to proceed at an attractive valuation, which may take longer given the higher-for-longer rate backdrop. In the meantime, we look to earnings for signs of recovery in the core telco business, while potential asset listings, including Maya, remain the larger value-unlocking catalysts into 2027.

Action

We remain constructive on TEL, but near-term upside will likely depend more on core earnings recovery. The >8% dividend yield provides support while investors wait for clearer catalysts, with VITRO listing now pushed further out.

Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.