MEGAWORLD Corp. shares increased last week following the company’s announcement of a P15-billion investment to develop a new township in Laoag City, Ilocos Norte.
The company — in terms of value turnover — had P394.05 million worth of 174.89 million shares exchanging hands from Oct. 14 to 18, according to data from the Philippine Stock Exchange.
Megaworld shares closed at P2.31 on Friday, up 6.5% from P2.17 on Oct. 11.
Year to date, the stock inched up by 17.3%.
“Real estate investors as well as traders have taken interest after the company announced a massive P15-billion investment in a new township project in northern Luzon,” Juan Alfonso G. Teodoro, equity research analyst at Timson Securities, Inc., said in a Viber message.
According to Mr. Teodoro, the move is part of Megaworld’s plan to enter Northern Luzon and boost its position in other fast-developing areas such as the Central Visayas and Western Visayas.
“The company’s portfolio of townships will be strengthened by this project, which includes its previous projects in Batangas, Lipa, and other regions as well,” Mr. Teodoro said.
“Megaworld’s current expansion plans may provide investors further insight, as the stock soars above the overbought region and experiences market consolidation. With the potential for correction, investors may continue monitoring the market for volume fluctuations,” Ms. Alexandra G. Yatco, equity analyst at Regina Capital Development Corp., said in a Viber message.
Last week, Megaworld invested P15 billion to develop an 84-hectare Ilocandia Coastown mixed-use beachfront township over the next 10 years.
The property developer’s 34th township development will have a shophouse district, commercial district, town center, upscale residential developments, and its 1.4-kilometer beach line will have an area for sand dunes.
Megaworld President Lourdes T. Gutierrez-Alfonso said that the company chose to invest in Laoag City due to the Ilocos region’s economic growth.
This came after the Philippine Statistics Authority named the Ilocos Region — where Laoag City is located — as the third fastest-growing economy in the country, behind Western Visayas and Central Visayas last April.
Meanwhile, Kevin Andrew L. Tan, president of Megaworld’s parent company Alliance Global Group, Inc., said that the property developer sees a lot of opportunities in the Ilocos region, especially in tourism, as he hopes to unlock these through development.
Prior to that, Megaworld already had a presence in Western Visayas and Central Visayas, Ms. Gutierrez-Alfonso said, and last August, the property developer announced its 33rd township development by building a P12-billion “wellness township” in Lipa City, Batangas.
Ms. Yatco also said that Megaworld’s price-action movement could be affected by an additional 25-basis-point (bp) interest rate cut by the Bangko Sentral ng Pilipinas, and further changes in the inflation rate and unemployment rate.
Last week, the central bank cut the policy rate by 25 bps to 6% from 6.25% due to its assessment that price pressures remain manageable.
The BSP also decreased its inflation forecast to 3.1% from 3.4% for 2024, but it increased the inflation projection to 3.2% from 3.1% for next year, and to 3.4% from 3.2% for 2026.
On the other hand, the unemployment rate decreased to 4% in August, after more female workers were hired in the service sector, according to the Philippine Statistics Authority.
For the second quarter, Megaworld reported a 9.4% year-on-year rise in its attributable net income to P4.15 billion from P3.79 billion. Meanwhile, its consolidated revenue increased by 27.8% to P20.22 billion from P15.82 billion.
For the first half of the year, its attributable net income inched up by 8.6% to P8.55 billion from P7.88 billion, while consolidated revenues for the period increased by 22% to P39.1 billion from P32.04 billion.
Mr. Teodoro projects Megaworld’s net income to reach P4.64 billion for the third quarter and P16.26 billion for the entire year.
“As of Oct. 18, 2024, the price is currently having a short-term slight resistance level at P2.25. The price may possibly be going into a consolidation phase after rallying for over a month and may come to retest the 20-EMA support or back at P2.15 per share. The price may also be having a pullback as investors await the next earnings results in November 2024,” Mr. Teodoro said.
“As of writing, Megaworld’s current support level is at P2.19, while its resistance is at P2.39. Megaworld has recently broken out of its previously established range, with the stock’s closing price soaring above all moving averages. Given that Megaworld is currently positioned in the overbought region, a potential correction may occur in the following days,” Ms. Yatco said. — Charles Worren E. Laureta
