Quick takes from around the market
1. JG Summit [JGS 38.00, down 1.9%; 320% avgVol] [link] confirmed a report that it is interested in expanding its solar investments “outside of the conglomerate’s span” through its renewable energy subsidiary, Merbau Corp. Until now, Merbau has been focused on installing rooftop solar on businesses and properties within the Gokongwei group.
MB quick take: Rooftop solar installations are a way for landlords and businesses to monetize existing structures. The installations are not technologically difficult, but the ROI case is such that any significant missteps can really eliminate any profits or savings, so it pays to use an experienced installer. Perhaps Merbau will offer its installation experience to landlords with attractive rooftops in some kind of profit-sharing setup.
2. San Miguel [SMC 120.60, down 1.1%; 16% avgVol] [link] confirmed plans to discuss a joint bid with Metro Pacific Investments (MPI) on the privatization of MRT-3. The original article quoted Manny V. Pangilinan, President and CEO of MPI, as saying that “it might be good for us to reach out to SMC and see what we can do.”
MB quick take: MPI is giving off “guy going through midlife crisis” vibes, so I just don’t have a great handle on what they’re doing. The amount of cooperation between SMC and MPI appears to be increasing over time, which might come from the discussions the two have had on marrying their tollroad interests ahead of a potential IPO. I’m still waiting for MPI to ramp up its activity now that it is no longer constrained by the vulgarities of being a publicly listed company.
3. Megawide [MWIDE 3.28, down 0.6%; 26% avgVol] [link] confirmed reports that it would look to IPO its affordable housing subsidiary, PH1 World Developers (PH1), and added that its own “existing projections” show that “the order book of PH1 has the potential to achieve a value of P200 billion within a 10-year timeframe.”
MB quick take: The value of a company’s order book is not the same as the value of the company. A good example of this is EEI [EEI 6.12, down 1.0%; 99% avgVol], which said that it expects to see the value of its 2024 order book hit P60 billion. The marketcap of EEI is P6.4 billion.
