1、 Philippines Market Strategy 2020 Outlook:Confidence on the growth ahead Strategy|Strategy Figure 1:Philippines P/E relative to APxJ P/E at eight-year low now Source:Company data,Credit Suisse estimates 12-month target set at 9,200.We set our PSEi 12-month target for 2020 at 9,200,which is 19%above
2、the current levels and implies a 2020E P/E of 17.0 x.We expect EPS to rise by 12.4%next year and anticipate a further improvement in ROEs by 0.5 pp.We believe the index should rerate alongside a continued growth trend driven by:(1)a recovery in household&discretionary spending,(2)increased governmen
3、t expenditures,(3)improved system liquidity and(4)peso trading sideways after improving in 2019.Why are we confident?The lagged effects of low inflation and interest rates will continue to support demand recovery.Real interest rates remain favourable,supporting a strong peso.We expect this to lead t
4、o margin expansion for several companies.We are also positive on the catch-up spending of the government and on the infrastructure rollout as the flagship projects are rationalised.Ultimately,excess system-wide liquidity,combined with infrastructure spending,will serve as catalysts in 2020,rather th
5、an a risk as some perceive.Are fundamentals enough for a re-rating?Market liquidity,which exhibits a correlation with market valuations,has been on a decline for a majority of the last five years.Despite the recent pick up,valuations have decoupled and remain relatively low.We argue that there is ro
6、om for a recoupling.Regulatory risk has also risen in recent weeks,with President Duterte attempting to revoke long-standing government contracts.We note that considerable portions of most conglomerates are not highly exposed to this regulatory risk.We still prefer Banks and Consumer.Our model portf
7、olio is Overweight on banks and consumer.We are Market Weight on conglomerates,with preference for the ones that are exposed to the consumer sector.Our top conviction picks for the market include Metrobank(MBT),Bank of the Philippine Islands(BPI),GT Capital(GTCAP),Megawide(MWIDE)and Robinsons Retail
8、(RRHI).0.91.01.11.21.31.41.51.61.7Nov 2010Nov 2011Nov 2012Nov 2013Nov 2014Nov 2015Nov 2016Nov 2017Nov 2018Nov 2019PCOMP P/E relative to MSCI Asia Pacific ex-Japan P/EPCOMP P/E relative to APxJ P/E now at eight-year low18 December 2019 Equity Research Asia Pacific|Philippines DISCLOSURE APPENDIX AT T
9、HE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the Firm may have
10、 a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.Research Analysts Hazel Tanedo 63 2 885 87757 hazel.tanedocredit- Chesca Bugia-Tenorio 63 2 885 87752 chesca.bugia-tenoriocredit-
11、 Danielo Picache 63 2 885 87758 danielo.picachecredit- Varun Ahuja,CFA 65 6212 3017 varun.ahujacredit- Justin Cimafranca 63 2 885 87756 justin.cimafrancacredit- 每日免费获取报告1、每日微信群内分享7+最新重磅报告；2、每日分享当日华尔街日报、金融时报；3、每周分享经济学人4、行研报告均为公开版，权利归原作者所有，起点财经仅分发做内部学习。扫一扫二维码关注公号回复：研究报告加入“起点财经”微信群。18 December 2019 Phi
12、lippines Market Strategy 2 Focus charts and table Figure 2:We forecast 2020 EPS to grow by 12.4%.Figure 3:and expect ROEs to improve further Source:the BLOOMBERG PROFESSIONALTM service,Credit Suisse estimates Source:Company data,Credit Suisse estimates Figure 4:Valuations remain cheap,despite a pick
13、up in market liquidity in recent months Figure 5:Regulatory risk has risen,but conglomerates are well diversified and exposure is relatively minimal Source:the BLOOMBERG PROFESSIONALTM service,Credit Suisse estimates Source:Company data,Credit Suisse estimates Figure 6:Credit Suisse top outperformer
14、s&top relative underperformers for 2020 Name Ticker Rating Price TP U/D Mcap P/E(x)ROE(%)EPS Growth(%)bn US$18A 19E 20E 18A 19E 20E 18A 19E 20E TOP OUTPERFORMERS GT Capital GTCAP.PS O 856.0 1,053.0 23%3.6 13.5 11.1 9.9 8.7 9.9 10.2-10.0 21.5 11.9 Metropolitan Bank&Trust Co MBT.PS O 66.2 87.0 31%5.9
15、12.8 10.5 9.0 8.4 9.2 9.9 6.3 22.7 16.1 Robinsons Retail Holdings,Inc.RRHI.PS O 74.1 108.0 46%2.3 20.1 22.7 19.8 9.7 7.3 7.9-8.6-11.6 14.8 TOP RELATIVE UNDERPERFORMERS Alliance Global Group Inc AGI.PS U 11.4 10.8-5%2.2 7.6 6.9 6.4 10.3 11.2 11.6 1.3 9.7 9.1 Filinvest Land FLI.PS U 1.5 1.4-3%0.7 6.0
16、5.6 4.9 9.1 9.2 9.7 3.7 8.1 13.6 Megaworld Corp MEG.PS U 4.1 4.2 2%2.6 8.6 7.6 7.2 10.2 10.5 10.4 15.8 13.1 6.2 Source:Company data,Credit Suisse estimates 26.923.512.612.512.512.412.310.08.76.36.03.63.6051015202530KRINAPxJTWIDPH-CSCNPH-ConsTHHKMYAUSG11.6%12.4%11.8%12.7%13.1%9.7%9.9%9.3%10.1%10.5%8.6%8.8%9.0%9.2%9.4%9.6%9.8%10.0%10.2%10.4%10.6%10.5%11.0%11.5%12.0%12.5%13.0%13.5%2016A2017A2018A2019E2020EDuPont ROE(Index ex-Banks)Net Income Margin(Index ex-Banks)14151617181920212240045050055060065
