BEST SMALL CAP COMPANY
Megawide Construction Corp.
There were three leading candidates for this award – D&L Industries, Rockwell Land Corp. and Megawide Construction.
D&L came to the market with its initial public offering (IPO) last September and has solid plans to grow its overseas market for both semi-processed goods and raw materials, but some analysts felt it was too early to accurately measure its success.
Rockwell Land has a strong niche in high-end of property development the market despite only having a market cap of PHP13.1 billion (US$298.3 million). Plus it has delivered well both on branding and positioning.
However we felt Megawide Construction was most impressive, for its work in the construction and infrastructure project space. The company is a leading player in the Philippine government’s public-private partnership (PPP) programme.
Last August it won a majority of the National Classroom Programme, worth PHP16.3 billion, and it has now qualified to bid for the right to expand and operate the Mactan-Cebu International Airport in partnership with Indian airport operator GMR Group. In addition to gaining market share in the construction industry, Megawide is feted for its innovation.
Investors are certainly convinced of its pedigree. Its shares have risen from PHP12.54 in August 2012 to PHP15.26 at the time of going to press.
BEST MEDIUM CAP COMPANY
Vista Land
Fresh out of small-cap territory, Vista Land’s market value passed the US$1 billion mark in November 2012. But despite the fact it is a baby in the mid-cap category, Asiamoney felt that its management has been more dynamic than that of many of established peers.
In the past, analysts were unsure whether Vista Land’s growth plans were viable, but over the past year the company has successfully pulled its strategy together.
“Vista has continued to execute, and to roll out projects. There was some scepticism in the past over whether what it was doing was sustainable, but it has delivered the numbers and continued the corporate vision as well as defying some of its critics. It’s a very solid company with a good balance sheet,” says Alfred Dy, head of Philippines’ research at CLSA.
The company has distinguished itself by avoiding the middle-income high rise boom in the Philippines – which is exposure to oversupply risks – focusing instead on the housing-and-lot type of development.
Its plans for provincial expansion outside of Metro Manila are well thought through, and its balance sheet is in good shape.
“It’s managed to return to the domestic debt market, it has a strategy for consistent, sustainable growth and it has managed to successfully compete with quite a number of developers,” notes Jody Santiago, a Philippines analyst at UBS.
BEST LARGE CAP COMPANY
Ayala Land
Property developer Ayala Land combines an aggressive expansion strategy with innovation and tenacity in executing this plan. As a result revenue growth is strong across all segments of the company and is likely to grow by a further 15% in 2014.
Its success stems from continued strong sales take-up, substantial unbooked revenues and further roll-out of shopping centres, office and hotels, and resorts, according to Maybank research. It is this steady roll-out of projects that places the company ahead of its peers.
Ayala Land is doing a lot of things on the ground. It has sustained momentum and shown commitment to a renewed aggressiveness in the market place,” says CLSA’s Dy.
“In the past it was content with the upper-middle to high-end of the market but in the past few years it has made a conscious effort to go to the middle and mass-market.”
He believes the strategy is likely to pay off, particularly as youthful demographics in the Philippines mean there will be a wave of new demand for housing over the next decade. Ayala Land’s expansion strategy from high-end to low-end is a sound strategy, and its timing is particularly good in the low interest rate environment. And the expansion shows no sign of slowing.
“They’ll be doing a lot of project launching in the second half of the year, following through on the new markets and trying to get more people buying their products across the board,” adds an equity analyst at a Philippine house.
BEST EXECUTIVE
Enrique Razon, chief executive, International Container Terminal Services, Inc. (ICTSI)
Enrique Razon launched ICTSI with his father in 1987 when they won a bid to operate the Manila International Container Terminal in the first privatisation of a Philippine port. Since then he has acquired over 20 ports in countries as diverse as Argentina, Columbia and India. This level of global expansion is unusual for a Philippine company.
“For domestic companies the history of going abroad has been a bit chequered, but ICTSI has established a niche on global mid-sized ports. The company has a good track record in turning around and managing mid-sized ports globally and that’s a template it will continue to follow,” says the Philippines analyst.
“Razon has been able to grow that portfolio and execute the strategy and for the past 10 years this guy has been on a roll,” adds CLSA’s Dy.
Razon is not content to do business in ports alone. In March this year, he launched his debut venture into gaming and opened the US$1.2 billion Solaire casino resort – one of four resorts given licence to open in Manila, as the Philippines tries to position itself as a gaming centre to rival Singapore and Macau.
He has told local press that he plans to replicate the model overseas, with a view to moving into Macau when the government begins granting new licences to foreigners. Given Razon’s success so far, it would take a brave person to bet against him.