By Marissa Mae M. Ramos, Researcher
UNIVERSAL ROBINA CORP. (URC) is one of the most actively traded issues last week as investors took notice of its resiliency despite the lockdowns in several areas of the country.
A total of 9.16 million URC shares worth P1.18 billion were traded from Aug. 3 to 7, data from the Philippine Stock Exchange showed.
The Gokongwei-led firm closed at P135.40 apiece on Friday, up by 10.6% from its closing price on July 30. Since the start of the year, the stock has dipped by four percent.
“URC was one of the most actively traded stocks this week due to its stronger-than-expected attributable earnings for [the second quarter],” China Bank Securities Corp. Research Associate Zoren Philip A. Musngi said in an e-mail.
“Investors may have also flocked to URC due to the relative resiliency of the firm (being a manufacturer of consumer staples) in light of the reinstatement of MECQ (modified enhanced community quarantine) in Metro Manila and adjacent provinces,” Mr. Musngi added.
In a separate e-mail, RCBC Securities, Inc. Research Analyst Frances Nicole L. Samorano said the company’s first-half earnings reflected “the resiliency provided by URC’s diversified portfolio of consumer products and its management’s quick adaptation to shifts in the current difficult operating environment.”
URC’s revenues ended flat during the April-to-June quarter, bringing its first-semester haul to P67.41 billion.
Meanwhile, its net income attributable to equity holders of the parent jumped 69.2% year on year to P3.54 billion in the second quarter, thanks to foreign exchange gains.
Attributable net profit increased by 7.7% to P5.53 billion during the first six months of the year.
“Excluding the one-off from foreign exchange gains, income is still double-digit up despite flattish sales during [the second quarter]. This is indicative of its readiness to grow despite the headwinds posed by the pandemic,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
President Rodrigo R. Duterte implemented a strict lockdown in mid-March to contain rising cases of the coronavirus disease 2019.
Restrictions were moderately eased in May, but bigger increments of the cases last month renewed the pressure to put back Metro Manila, Laguna, Cavite, Rizal, and Bulacan under MECQ.
The new lockdown started last Tuesday, Aug. 4, and will end on Aug. 18 after health workers asked for a “timeout” amid the overwhelming demands of the pandemic.
“As the community quarantine stretched on, branded consumer food (BCF) Philippines continued to enjoy strong demand for its snacks, coffee, bakery and noodle categories,” RCBC Securities’ Ms. Samorano said.
“BCF international is set to fare better as well coming into the second half as Vietnam and Thailand have so far lifted restrictions much earlier than the Philippines. Management even observed stockpiling behavior once again in Australia due to their second lockdown,” she added.
China Bank Securities’ Mr. Musngi also noted a possible sustained robust operating performance of food manufacturers like the URC.
“Moreover, URC’s stock price performance is also seen to remain relatively more resilient than the overall market due to the defensive nature of its business,” he said, adding that the closing price on Friday was right above the range resistance at P134.80 apiece.
“In case prices hold above this range resistance and given current price momentum, we may see URC testing the P149 level. Support levels are pegged at P134.80 (resistance turned support) and P118 thereafter,” Mr. Musngi said.
Rachele Lee, an equities trader at RCBC Securities, placed primary and secondary support levels at P132 and P126.50 per share, and resistance at P138.10 and P142 apiece.
For Diversified Securities’ Mr. Pangan, immediate support is at P132.20 while immediate resistance is at P141.50.