Quick Take: PSE's "optimistic targets" and 2 more market updates
PSE [PSE 164.0 3.8%] [link] targets P160-B in IPOs and other equity raising events in 2023. The PSE’s President, Ramon Monzon, said that he is “optimistically targeting” up to 14 new IPOs this year, which, combined with other equity raising events, could raise up to P160 billion. Mr. Monzon said that nine of the companies were large enough for listing on the main board, with three listing on the SME board, and two REITs. The PSE had nine IPOs and a total equity transaction value of P110 billion in 2022.
MB Quick Take: The “optimistic targets” represent a 55% increase in IPOs, and a 45% increase in total equity raised, respectively, but overall valuations will need to significantly improve for many of the deferred IPOs to dust off their applications and come back to the market. The biggest “get” would obviously be Enrique Razon’s Prime InfraCapital, but I’ve heard rumors that SM Prime Holdings [SMPH 35.0 1.3%] has contemplated supersizing the scale of its impending REIT IPO.
DDMP [DDMPR 1.3] [link] reveals no major changes in its 3-year plan. Occupancy is marginally improved to 92.5%, but DDMPR’s weighted average lease expiry marginally declined to 2.2 years. Nearly 36% of all DDMPR’s leases expire this year. DDMPR said that its top goal for the coming years is to diversify its tenant mix for its existing buildings, as its current mix is dominated by office tenants (94%).
MB Quick Take: While the 3-year plan says that DDMPR is prepared to accept land assets from its parent, DoubleDragon [DD 6.70 unch], that’s not any different from last year’s messaging on the same topic.
MREIT [MREIT 14.2 1.7%] [link] 3-year plan reveals 200 basis point drop in occupancy (from 97% to 95%) on top of a three-quarter trend of falling distributable income. MREIT’s lower Q3 dividend was 100% of MREIT’s distributable income for the quarter. MREIT reiterated that it is on-track to achieve its target of 500,000 square meters of gross leasable area by the end of 2024, with plans to acquire an additional 175,000 sqm of leasable area in addition to the property-for-share swap deal that it announced earlier in 2022.
MB Quick Take: I like MREIT’s aggressive approach to growth, but I don’t like to see degrading operational metrics. Falling occupancy represents reduced efficiency and lost dividend returns for investors. Padding MREIT’s GLA stats over the next two years will make for great headlines, but those leasable square meters are only as good as the leases that MREIT is able to negotiate.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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