By MST Business | Posted on Jun. 04, 2013 at 12:01am
[ manilastandardtoday.com ]
Megaworld, the country’s leading real estate developer and business process outsourcing landlord, received an upgraded stock price target of P9.01 per share and a buy rating online brokerage firm COL Financial Private Clients Group in a recently released report.
Megaworld’s target price represents a 20-percent discount to the COL Financial’s net asset value estimate of P11.26 per share.
COL predicted Megaworld would enjoy a net income of P7.9 billion in 2013, up from the P7.4-billion earnings in 2012. This gives the real estate giant a price to earnings ratio of about 14.4 this year, or way below other real estate properties having a price to earnings ratio of 20x or more.
COL Financial said the upgraded rating was due to the high prices of the company’s properties located in prime locations such as the Bonifacio Global City combined with the country’s strong economic growth, low interest rates and continued infrastructure developments benefitting real estate companies.
It said the increase in income of Megaworld would be driven by its P180 billion in sales backlog and strong rental portfolio, assuming a six-year development period and a 16x price to earnings ratio valuation.
COL Financial said the company’s current stock price was a good buy, given the stable source of cash flows coming from its residential, office and commercial developments.
Megaworld is looking to double rental income from P5 billion in 2012 to P10 billion within the next five years. The growing OFW remittances, expanding BPO sector, and investments in infrastructure would further increase the property prices in the company’s landbank.