MEGAWIDE CONSTRUCTION Corp. was one of the most actively traded stocks in the Philippine Stock Exchange last week on account of the attractiveness of the company’s future growth prospects according to analysts.
A total of 38.48 million shares worth P763.98 million exchanged hands on the trading floor from Feb. 26 to March 1, data from the Philippine Stock Exchange showed.
Megawide shares closed at P19.48 apiece on Friday, down 2.6% from the previous day. On a week-on-week basis, the stock price is up 3.1%. Year to date, it is up 7.2%.
“Megawide’s disclosures on its future projects this past few weeks were good news,” said A&A Securities, Inc.’s trader Jeng T. Calma.
UPCC Securities Corp. equity trader Aristotle D. Reyes, Jr. was of a similar assessment. In particular, he cited the news that mass housing developer 8990 Holdings, Inc. tapped Megawide to build its horizontal housing project in Meycauyan, Bulacan.
“[This is] a good addition to the construction segment of Megawide, which saw a slowdown [in revenues] last year due to delays in permits and contracts. So I expect a good pick up this year as the delayed projects last year will start this year. So for investors, this is quite an assurance that the good earnings will continue and sustainable,” Mr. Reyes said.Last Wednesday, Megawide signed a memorandum of agreement with 8990 Holdings to construct about 5,000 townhouses in the latter’s 41-hectare Deca Homes Meycauayan in Barangay Saluysoy, Bulacan.
On Feb. 22, the engineering and infrastructure conglomerate signed a similar deal with PHirst Park Homes, Inc. for the use of the former’s precast technology to build more than 1,800 homes in Lipa, Batangas.
Although the stock’s price dropped last Friday, A&A Securities’ Ms. Calma said that it was only a technical matter. “Since it was on an uptrend for how many days, some investors who bought at a lower price were profit taking,” she said.
A&A’s Ms. Calma said that Megawide is a good buy in the long term, pointing to the company’s share buyback program in addition to its future projects inked this year and last year.
For UPCC’s Mr. Reyes, Megawide has a “very promising” growth, citing its Cebu airport and Parañaque terminal projects, as well as potential projects from the government.
“The company is doing a very good job in its Mactan, Cebu airport which continues to surpass target tourist arrivals that resulted to more than expected earnings growth. Different business groups and the government lauded Megawide for its hard work to market Cebu to tourists around the world. Recently they added new direct flight routes to China and other countries, which will result in more tourist arrivals in the province,” he said, referring to the Mactan-Cebu International Airport (MCI), which is operated by Megawide’s joint venture with GMR Infrastructure, Ltd.
Mr. Reyes also mentioned that three out of four of its towers at the Parañaque Integrated Terminal Exchange (PITX) has already been leased out.
PITX, a P2.5-billion terminal built by Megawide’s subsidiary MWM Terminals, Inc., opened early November last year. The terminal is expected to receive an average foot traffic of 100,000 a day but is expendable to 200,000 passengers daily.
“This will give Megawide huge recurring income which makes the income more stable, less cyclical,” he said. “For the construction segment, we project it will pick up especially that the government is starting to roll out major infrastructure projects that will spur growth for infrastructure/construction industry.”
Mr. Reyes also noted that the stock has consistently benefited from foreign buying since Feb. 18.
“Megawide has been actively traded because of foreign funds… This means foreign investors sees a lot of potential in the company,” said Mr. Reyes.
Megawide’s net income attributable to parent fell by four percent to P1.32 billion in the first nine months of 2018 compared to P1.38 billion in the same period in 2017.
Revenues dropped by 11% to P12.746 billion, weighed down by the 17% decline in revenues from the construction segment. Revenues from airport operations jumped 26% to P2.180 billion, as the MCIA saw double-digit growth in passenger volume.
For this week, A&A’s Ms. Calma has placed Megawide’s strong support at P18 per share while resistance at P19 per share.
“Support and resistance will be P19 per share and P20.50 per share, respectively,” UPCC’s Mr. Reyes said. — Carmina Angelica V. Olano