INVESTORS bought shares in DMCI Holdings, Inc. as the year nears its end, with market players riding on the firm’s upward trend and its better-than-expected performance despite high-interest rates and the threat of inflation rising in the coming months.

A total of 53.19 million DMCI shares worth P575.42 million were traded from Dec. 19 to 23, data from the Philippine Stock Exchange (PSE) showed.

The holding firm’s share price went up by 7.7% week on week, finishing at P11.48 apiece on Friday from its P10.66 close the previous week. Year to date, the stock has gained 48.9%.   

Analysts pointed to positive market sentiment for DMCI’s performance despite the caution on investing in companies with units in the property sector ahead of higher interest rates and inflation. 

Mark Crismon Santarina, head of electronic trading at Globalinks Securities and Stocks, Inc., said in a Viber message that the sales numbers of DMCI’s property arm remain to be strong.

“From July to September, DMCI Homes more than doubled (159%) its sales and reservations,” he said.

Mr. Santarina said DMCI Homes’ partnership with Robinsons Land Corp. (RLC) for a property project in Las Piñas “surely will attract investors taking advantage of redevelopments and high growth areas” south of Metro Manila.

“DMCI bagging the subway project and of course, the demand for coal and power is the catalyst for DMCI’s recent price movements,” he added.

DMCI and its subsidiaries are in construction, real estate, coal and nickel mining, power generation, and water distribution.

Jose Rafael Mendoza, equity research analyst at Philippine National Bank (PNB), said in an e-mail interview that DMCI’s listed subsidiary Semirara Mining and Power Corp. contributed to the group’s growth due to continued coal demand. 

“However, we remain cautious that the real estate industry will be challenged next year amid rising interest rates and input costs which will keep project launches subdued relative to pre-pandemic levels. The effect of recent news of the joint project of DMCI Homes and RLC was likely minimal to investors,” Mr. Mendoza added.

Last week, DMCI’s property subsidiary DMCI Homes announced the completion of the first building of its joint condominium project with RLC named Sonora Garden Residences in Las Piñas.

Cadence, the first building with 40 storeys and 867 units, is expected to be turned over by June 24 next year. Post-turnover, DMCI and RLC are expected to record P5.55 billion in sales from the project, which is expected to bring more once its amenities are completed.

Two more buildings, named Liran and Stellan, are set to rise in Sonora Garden.

Analysts said that the ongoing projects of DMCI’s subsidiaries and the positive market outlook will continue to drive the stock’s uptrend in the short term. They added that economic reopening could boost the residential property segment next year unless the government fails to tame inflation, which could cause prices to further rise.

“There are definitely headwinds next year, but I think DMCI will still be profitable given the recent numbers that they disclosed, demand continues to be there,” Mr. Santarina said.

Analysts said that DMCI’s better performance made the stock more attractive to investors. The company’s attributable net income in nine months to September surged by 105% to P27.63 billion.

Mr. Mendoza said the stock is fairly priced this year, hitting PNB’s P10.60-per-share target and surpassing it, as DMCI was trading at above P11 per share.

“DMCI definitely is one of the winners of 2022. As mentioned by the management they are projecting strong earnings next year because of the continuous demand for the products of their subsidiaries. I believe DMCI will still be a market favorite next year,” Mr. Santarina said.

He placed his full-year profit estimate for the stock at P35.8 billion, factoring in higher costs of raw materials and construction slowdown due to inflation.

PNB’s Mr. Mendoza said that the favorable third-quarter income was mostly due to Semirara Mining and Power’s 152% year-on-year growth to P5.8 billion.

For the last trading week of the year, Mr. Santarina gave his support and resistance levels for DMCI at P10.20-P9.60 and P12, respectively, as the stock recently hit its 52-week high. — Bernadette Therese M. Gadon