Quick takes from around the market

Cebu Landmasters [CLI 2.65, 1.5%; 456% avgVol] [link] sold out its P2.5-billion Davao City development in less than a week, demonstrating what CLI referred to as “robust market absorption” of CLI’s projects in VisMin. There are 546 units in the development, ranging between studio and one-bedroom floor plans (22 sqm to 43 sqm), and priced between P3.1 million to P8.8 million.

 

MB Quick Take: As commercial and luxury developers continue to struggle, the developers that have focused on the middle-class market are still showing great uptake for their projects. Yet, for as well-respected as CLI appears to be by buyers and residents in property buying forums and Facebook groups, the stock price still lags. It’s only 4% off its 2023 high of P2.77/share, and it’s up 13% from its April low of P2.34/share, but it’s not near where it was through most of 2022 and definitely not close to that massive spike back in June 2021.
 

8990 Holdings [HOUSE 9.50, 2.6%; 319% avgVol] estimates that it will earn ?155 billion in potential revenues over the next eight years, and make use of more than 700 hectares of its landbank to develop projects across all regions. HOUSE said that its cost control measures have managed to preserve the company’s Gross Margin level at 50%, and that lower sales figures in Q1 of this year were due in large part to the slow reaccreditation in PAG-IBIG.

 

MB Quick Take: Another mid-market developer with big dreams and a willing market of eager buyers. HOUSE suffers from the same stock chart problem that has affiliated CLI, which is that it’s had a hard time translating all of that market energy and reputation into share price wins for its shareholders. Like CLI, HOUSE is doing better than it did in 2021 by a wide margin, but it’s really underperforming its 2022 stock price. I know many investors that got into HOUSE a while back and who are quite patient, but it’s got to be frustrating for investors to be trading so far away from pre-pandemic highs. Especially in a sector that is as hot is mid-market residential is right now.
 

Asia United Bank [AUB 47.30, 0.5%; 12% avgVol] [link] teased H1 net income of ?4.1 billion, up 42% y/y, driven by a 28% surge in net interest income with a total loan volume increase of 9%. AUB’s consolidated net income for Q2 as P2.1 billion, which is a 32% increase over the same period last year.

 

MB Quick Take: AUB said that it is looking into the digital space for its next leg of growth, where it notes “plenty of opportunities in greater collaboration” that gives AUB “confidence in sustaining [its] gains.” At this point, any bank that is not neck-deep in some kind of digital banking, loans, or payment business is missing the boat, so it’s good to hear AUB proclaim its interest in this space so clearly. But as many bank customers will tell you, it’s not enough to just “be” online with some janky, reduced-function port of your 2010-looking website. The BSP’s push into digital is going to mean that most banks will have to develop a “digital-first” strategy. Some will need to walk before they run, but I like how AUB knows that it needs to hit the gym, and that “running” in this case is a serious undertaking that (thankfully) comes with some potentially great upside.

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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.