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Stock Commentary

'Robust' demand keeps Sta Lucia afloat

Merkado Barkada
'Robust' demand keeps Sta Lucia afloat

Sta. Lucia Land's [SLI 3.04] Q2/21 profit of P514 million, up 99% from Q2/20 profit of P259 million, and up 21% from Q1/21 profit of P425 million. The Luzon-based mid-market real estate developer posted a 90% increase in 1H net income thanks to the continued strong performance of lot sales and to the savings brought to the bottom-line by the CREATE Law which lowered the corporate income tax rate. SLI noted that the sale of residential lots has been “resilient” through the pandemic.

The company believes that its developments are attractive due to the larger size of the lots that buyers can get thanks to SLI locating most of its projects on the “fringe” of the more populated areas. The vast majority of SLI’s 115 projects are in the CALABARZON region, with 25 in Davao and the remaining seven projects in various areas around the country.


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Another win for the mid-market developers like 8990 Holdings [HOUSE 7.40] and Cebu Landmasters [CLI 3.15]. It’s clear that the pandemic did very little to destroy the demand for housing, and earnings report after earnings report testifies to that. However, unlike HOUSE which is trading at or near its COVID-crash lows, SLI’s stock has soared 69% over the past 12 months and even set an all-time high of P3.35/share about two months ago. I’m not as familiar with SLI’s projects as I am with some other developers, but a quick glance at the financials shows that the company has recovered from COVID; it’s beating pre-COVID highs, out-performed Q2 and 1H on a year-on-year basis, and outperformed Q1 on a quarter-on-quarter basis. Whatever it’s doing is working.

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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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STA LUCIA LAND

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