Quick Take: Figaro's plan and 3 more market updates
Figaro [FCG 0.73 1.4%; 46% avgVol] [link] was forced by the PSE to provide “additional information” about the company’s plan to sell 8.5 billion voting preferred shares to its owner at P0.02/share. The PSE wanted to know a timetable for the implementation of the transaction, and it wanted FCG to list “the benefits which are expected to accrue to the listed issuer as a result”. The company’s response said that the overall increase in the company’s authorized capital stock (ACS) is meant to give it fundraising flexibility, and that the sale of prefs to its owner at a massive discount is meant to satisfy the SEC’s requirement that at least 25% of an ACS increase is subscribed.
MB Quick Take: IMO the funny part here is that while the 25% of the ACS raise is theoretically “subscribed”, in that it’s been sold to Camerton under an agreement, Camerton has only had to pay a 25% downpayment on that subscription, with the rest of the payment due whenever Camerton decides that it’s advantageous to Camerton to do so. FCG did a P680 million ACS raise based on a P42.5 million payment, which is just over 6% of the ACS raise. Again, this is not against the rules, it’s just FCG taking full advantage of a loophole.
MRC Allied [MRC 0.23; 76% avgVol] [link] said that its parent company, Menlo Capital, assigned its P130 million “deposit for future subscription” in Philippine Telephone and Telegraph [PTT suspended] to MRC. In payment, MRC will recognize a P130 million “deposit for future subscription” in Menlo’s name, for MRC stock that can be executed at a future time.
MB Quick Take: Zoomed out, this is just part of MRC’s slow-motion stumble into the tech industry that it telegraphed a long time ago when the MRC board approved spending up to P1 billion on PTT preferred shares. While MRC hasn’t done any of that buying yet, at least they’ve got this deposit now that they can use to do that in the future. I don’t know, this transaction looks weird to me.
LT Group [LTG 9.48 1.4%; 45% avgVol] [link] said that the Manila International Airport Consortium (MIAC) has split its P267 billion redevelopment plan into three phases that aims to increase NAIA’s annual passenger capacity from 31 million to “about 70 million” by 2048. LTG said that the first phase, which they call “Quick Wins’, would “quickly increase” NAIA’s capacity to 54 million by 2025 (74% increase). The second phase would increase NAIA’s capacity by an additional 8.5 million to 62.5 million over the subsequent three years, by 2028. The last phase would increase NAIA’s capacity by 7.5 million to 70 million over the next 20 years, completed in 2048.
MB Quick Take: After all of the shenanigans that we’ve seen around the NAIA rehab, it’s hard to put much stock behind anything that is being said at this point, let alone try to price out how a potential award of this magnitude might play out for all of the massive players that form part of the MIAC. The one thing that jumps out to me (aside from the lack of punchy names for Phase 2 and 3) is that the press release says that NAIA is projected to process 55 million passengers by 2028, but that the “Quick Wins” phase will still only get NAIA up to a stated capacity of 54 million. Sigh.
Wilcon [WLCON 24.60 0.8%; 36% avgVol] [link] management expects “much muted growth” in 2023 as compared to 2022, but may still exceed its plan to add between 8 and 10 stores this year “barring any major disruptions”. WLCON noted the “high base” of 2022, and said that it is “looking beyond short-term fluctuations” to focus on continued expansion, product upgrades, and “adapting its store formats”, and “merchandising to different markets”.
MB Quick Take: WLCON’s growth story has only been constrained by its footprint, so a “build build build” mentality something that shareholders will want to hear. They’re probably not going to like the heavy signaling that short-term earnings might not surprise and delight like they have in recent quarters, but as a market sector leader, WLCON has the time and space to weather these kinds of short-term storms without having to take its eye off the long-term ball. I don’t know any contractors that go to AllHome [HOME 1.68 0.6%; 60% avgVol], and that company has under-delivered on store growth for years.
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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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