By Ana Olivia A. Tirona, Researcher
INVESTORS loaded up on Wilcon Depot, Inc. last week after upbeat third quarter earnings report.
Data from the Philippine Stock Exchange (PSE) showed a total of 25.38 million Wilcon shares were traded last week worth P779.92 million, making it the 15th most actively traded stock between Oct. 25 to 29.
The home improvement and construction supplies retailer closed at P31.20 per share on Friday, 9.9% higher than its closing price of P28.4 apiece on Oct. 22. Likewise, the stock shot up by 73.5% since the first trading day of 2021.
Its stock movement was driven up last week after the release of its third-quarter earnings report, Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message on Friday.
“The home improvement and construction supplies retailer easily beat last year’s third quarter performance, but due to the movement restrictions applied as a result of the [coronavirus disease 2019] Delta variant, WLCON’s third quarter numbers underperformed its second quarter numbers by a small margin,” he said, referring to the stock’s ticker symbol.
“WLCON also enjoyed higher third-quarter 2021 earnings thanks to tax savings that cushioned a slump in sales and an increase in operating expenses,” he added.
Wilcon’s third quarter net sales dipped by 1.9% to P6.62 billion from P6.749 billion a year ago, weighed down by nearly two months of mobility restrictions implemented back in August of this year.
Its January to September revenues meanwhile jumped by 27% to P20.05 billion from P15.79 billion a year earlier amid “generally uninterrupted operations” in Luzon.
On the other hand, the depot’s net income for the July to September grew by 16.7% to P662.14 million from P533.21 million logged in the same period last year.
This brought the nine-month net earnings to P1.87 billion, more than double the P885.57 million it earned last year.
This “sustained recovery” in both Wilcon’s top line and bottom line prevented the stock from vulnerable market sell-off last week, China Bank Securities Corp. Research Associate Lance Gabriel U. Soledad said in a separate e-mail interview.
“[The depot] is still a viable long-term investment given that it can still further take advantage of the growing local economy/home improvements industry as it remains a market leader and it looks to expand its nationwide store network to 100 by 2025,” he added.
Wilcon operates 63 stores nationwide, 56 of which are depot formats and seven are smaller “Home Essentials.”
It plans to open a total of nine new depots this year and one Home Essentials branch. It launched seven depots and one Home Essentials to date.
“Shareholders would like to see WLCON finish off its nine-store expansion within this year and continue margin buffering through its product mix adjustments that have so far had a positive impact,” Mr. Arce said.
Mr. Arce expects Wilcon’s bottom line to finish P2.5 billion for 2021 and P3.1 billion for 2022.
For resistance and support levels this week, he forecasts P31.60 and P29.60, respectively.
Meanwhile, Mr. Soledad expects the stock to consolidate between P28.00 and P33.00 this week.