Stock Commentary

Quick Take: Cebu Pacific clarifies and 2 more market updates

Merkado Barkada
Quick Take: Cebu Pacific clarifies and 2 more market updates

Cebu Pacific [CEB 44.0 2.3%] [link] clarified that its ability to emerge from a net loss to a net profit in Q1 of 2023 depends on a lot of factors, and could be prevented by rising fuel prices or a significant drop in the peso’s value relative to the US Dollar. CEB confirmed that it would spend P48 billion on capex in 2023, and that “most” of that would go to “aircraft-related expenses”.

MB Quick Take: While CEB is making a big deal about returning to its pre-pandemic capacity, it’s volume that is actually the critical metric for CEB’s profitability. CEB’s “super power” was in stuffing planes to their absolute maximum to squeeze as much profit as possible from each flight, so until we start to hear about passenger volume returning to pre-pandemic levels, CEB’s profitability is always going to be vulnerable to shifts in inputs like fuel costs, and macro-economic problems like China’s COVID situation and the value of the peso.

Chemical Industries of the Philippines [CIP 167.9 11.9%] [link] announced that it will conduct a follow-on offering (FOO) in 2023, on or before December 1, to sell at least 10% of CIP’s outstanding shares. The FOO will be all secondary shares, with half of the shares coming from Chemholdings Corporation, and the other half coming from A2K Holdings Corporation. There will be a minor amount of shares coming from RG Holdings Corporation to, to bring the total shares on offer to 1,029,661.

MB Quick Take: CIP is a company that doesn’t really do much of anything anymore, but it does have some significant land assets, and a website that hasn’t been updated since October 9, 2009. CIP is up 67% since November, but it’s basically sitting at around what it’s been worth, on a per-share basis, since 2012. It’s been as high as P288, and as low as P74, but it’s basically traded in the range of P120 to P190 for the last 10 years or so. Maybe it’s just a quick cash-out while waiting for a backdoor?

Boulevard Holdings [BHI 0.1] [link] announced that it will hold its annual stockholder’s meeting on April 20, 2023. The original meeting was delayed from October of 2022 without the BHI team providing an alternative date. BHI has been suspended for over three months for its failure to meet the PSE’s minimum reporting requirements.

MB Quick Take: I don’t know if my complaints from yesterday’s MB reached the eyes/ears of BHI board members, but I can’t imagine I’m the only person looking at BHI’s terrible corporate administration and wondering what’s going on. COVID was hard on tourism, but that excuse ended over a year ago, and if you have the time and money to buy a P103 million lot, you’ve got the time and money to pay some accountants and auditors to get your financials out on time.



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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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