THE ongoing economic uncertainty brought about by the coronavirus pandemic prompted investors of SM Prime Holdings, Inc. to take profit, making it the 10th most actively traded issue last week.
A total of 24.68 million SM Prime shares worth P875.36 million were traded from April 19 to 23, data from the Philippine Stock Exchange (PSE) showed.
The share price of the Sy-led property firm closed at P35 apiece, down 2.4% from April 16’s closing price of P35.85. Year to date, the stock has gone down by 10.8%.
In a Viber message, Mercantile Securities Corp. Analyst Jeff Radley C. See said SM Prime’s performance last week was reflective of the market’s “wait and see” attitude, adding that property firms are “heavily battered by the pandemic.”
SM Prime released several disclosures to the PSE on April 21, which includes the declaration of cash dividends, the release of capital expenditures (capex) for this year, the election of independent directors, and the amended full-year financial report. SM Prime’s annual report was first released on April 16.
The day of the disclosures’ releases sent the stock’s closing price down by 4% to P34.8 per share from P36.25 per share the previous day. Its closing price rebounded by 1.87% to P35.45 before falling back by 1.27% to P35 on Friday to end the trading week.
SM Prime named former central bank governor Amando M. Tetangco, Jr., Darlene Marie B. Berberabe, and J. Carlitos G. Cruz as newly elected independent directors, succeeding Jose L. Cuisia, Jr., Gregorio U. Kilayko, and Joselito H. Sibayan.
It also declared cash dividends of P0.082 per share with the ex-date set on April 30. This means only shareholders before this date will be eligible for the dividend payout.
“The cash dividends… were less than half of what they declared last year, which was understandable given the circumstances,” AAA Southeast Equities, Inc. Head of Research Christopher John J. Mangun said in an e-mail.
The company is also setting aside P80 billion for capital expenditures this year, to which Mercantile Securities’ Mr. See said signals SM Prime to be bullish despite challenges this year.
“This is the same capex without the pandemic. They are foreseeing that eventually the number of cases will subside, people would want to go out, and [the] economy will soon recover,” Mr. See said.
On the other hand, AAA Southeast Equities’ Mr. Mangun noted most investors have expected capex for this year to be “conservative as the economy struggles to recover from the effects of the pandemic.”
“Nobody wants to be aggressive right now because of the uncertainty,” he said.
SM Prime reported an attributable net income of P18 billion in 2020, 53.2% lower than the P38.09 billion posted in 2019. Its consolidated revenues fell by 30.8% to P81.9 billion from P118.3 billion previously.
Mr. See expects earnings to “continue to fall” given the current situation, but hopes to see a rebound “towards the second half” of this year as restrictions on the economy may be loosened by that time.
For Mr. Mangun: “We expect net income to come in 20-30% lower from the previous quarter as mall rentals and real estate sales remain depressed.”
“It is going to take a while for a big company like SMPH to recover,” he said, referring to SM Prime’s stock symbol.
“SMPH has already made the pivot to online both in retail sales and property although competition will be fierce as most businesses have done the same,” he added.
Mr. Mangun placed the stock’s support and resistance levels at P33.55 and P37.40 respectively.
Meanwhile, Mr. See pegged support at P34 and resistance at P37. — Abigail Marie P. Yraola