OUTLIER

A PLAN between MerryMart Consumer Corp. and FoodPanda Philippines to launch a purely online grocery service in the country has driven the former’s stock activity last week.

A total of 276.7 million MerryMart shares worth P864.84 million were traded from Sept. 21 to 25, data from the Philippine Stock Exchange showed.

MerryMart finished at P3.05 apiece last Friday, up 0.3% from its Sept. 18 close. Shares in the company went up by 103.3% from its closing price of P1.50 on June 15, when it first debuted in the bourse.

Philstocks Financial, Inc. Client Engagement Officer and Research Associate Piper Chaucer E. Tan attributed the deal between MerryMart and FoodPanda as the “main driver” for the stock’s movement last week.

“Notice when the news came out [on the deal], the activity of the stock went up,” Mr. Tan said in a phone interview, adding that this is a strategic move for both parties, especially for MerryMart given that its business is still small.

“MerryMart’s share price went up since people saw the company is adapting to the new normal,” Mr. Tan said, noting that having FoodPanda as a partner will benefit MerryMart’s logistics.

In an e-mail, Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio noted that while investors bought up the stock on the same day the news came out, it was followed by quick profit-taking with share prices starting to consolidate after reaching an intra-day high of P3.34 last Thursday.

In a statement last Wednesday, MerryMart, through its subsidiary MerryMart Grocery Center, Inc. is teaming up with FoodPanda for “PandaMart,” the latter’s instant grocery delivery service in the country. The first two branches are set to open in the cities of Makati and Manila next month. 

MerryMart will open its “dark grocery” service wherein customers do groceries from home and get their products delivered within 15 minutes. The exact locations of these groceries will be hidden and cater exclusively to online customers, hence the “dark” label.

In a statement, MerryMart Chairman Edgar “Injap” J. Sia II said these services will complement MerryMart’s brick-and-mortar MerryMart branches.

On the day of the official announcement, 58.51 million MerryMart shares were being traded compared with 34.53 million the day before, bringing the stock’s price to an intraday high of P3.18 per share before closing at P3.14 per share. The next day saw volume turnover reach 121.98 million shares with the stock’s price going up to as high as P3.34 before bringing the closing price down to P3.13 as traders took profits.   

MerryMart is rolling out an aggressive store expansion plan, with a target of hitting 25 branches by end-2020 and 100 branches by end-2021. It currently has 11 operational stores.

The company targets to have 1,200 MerryMart stores nationwide by 2030, which would generate P120 billion in systemwide revenues.

MerryMart’s gross revenues stood at P847.16 million in the second quarter, 31.2% more than the P645.47 million in the same period last year. However, its attributable net income dipped by three percent to P5.32 million from P5.48 million.

For the first half, the grocery operator’s gross revenues increased by 35.3% to P1.64 billion, while its attributable net income grew by 23.9% to P13.67 million.

Regina Capital’s Ms. Agravio expects “stable earnings” for MerryMart moving forward “barring the negative pandemic woes.”

“MerryMart has a bullish store network expansion program that is set to capitalize on today’s shifting trends. While it is not a market leader, its small store network will for now ensure large marginal returns in the near- and long-term,” Ms. Agravio said.

“[MerryMart] established a new support at P2.97. The next few trading sessions may see a few challenges to this level. Nevertheless, the resistance at P3.34 will likely hold,” she added.

For Philstocks’ Mr. Tan, primary and secondary support levels are pegged at P3 and P2.80, respectively, while primary and secondary resistance levels are placed at P3.20 and P3.40. — Ana Olivia A. Tirona