BEST SMALL CAP COMPANY
Megawide Construction Corp.
Megawide was founded in 1997 but only listed for the first time in February last year. The firm is run by young entrepreneurs, and analysts suggest that while other contenders might win in conservative-management stakes, Megawide has been the most notable company this year for establishing its presence in a short space of time and gaining market share in the local construction industry.
“They are becoming quite visible building high rises, so for a young company they’ve been very successful in establishing their presence in the vertical construction market and now they’ve entered into the PPP (public-private partnership) space,” said one analyst.
Megawide gained the lion’s share of the National Classroom Programme awarded in August as part of the government’s PPP scheme. The government gave out contracts worth PHP16.3 billion (US$397.97 million) to build 9,301 classrooms, and Megawide was offered PHP12.83 billion of the total.
As such, in partnership with its parent company Citicore Investment Holdings, the firm will receive annual lease payments over the next 10 years to build the classrooms.
Megawide listed in 2011 with a total market cap of PHP6.7 billion and a share price of PHP7.84. Since then, investors have rewarded the successful management of the company, and its stock price had more than doubled to PHP16.32 as of December 4.
BEST MEDIUM CAP COMPANY
Puregold Price Club
The mid cap award for the Philippines was a close call. ICTSI was a contender, as were Manila Water and Security Bank, all of which were deemed by analysts to have displayed impressive strategies this year in the mid-cap space.
But while these companies have all performed well, their strategies on the whole have been a continuation of good management in previous years.
ICTSI continues to grow its portfolio of global ports. Manila Water is replicating its successful domestic model further afield, and has announced it is buying into a similar concession in Jakarta, showing its potential for expansion. And Security Bank has used several years of trading gains to expand its core banking business, offer strong returns to shareholders and provide a clear strategy to maintain its growth.
But Puregold Price Club stands above these companies for a clever strategy that has allowed it to gain market share over larger rivals for the past 12 months.
The company launched its US$172 million IPO on December 13, 2011 during tough markets. Since then it has established a strong hold on the middle and lower-middle segments of the market, while rapidly expanding its business. It has opened 20 new stores in 2012 as part of its plan to double its number of stores from 100 at the end of 2011 to 200 by 2015.
“If you look at retailing here the big boys have dominated for a while, the SMs [Group] and the Robinsons. Puregold has really targeted the middle to lower middle segment. In spite of being a newcomer it’s held its own,” said one analyst.
In addition the company’s chairman Lucia L. Co was awarded the most outstanding Manilan by the city government of Manila for his work in the field of retail. Investors have also recognised the company’s potential and Puregold Price Club’s stock price has doubled over the past twelve months from PHP15.3 to PHP32.25 a share.
BEST LARGE CAP COMPANY
Ayala Land
Analysts almost unanimously agree that Ayala Land has been the best managed company in the large cap space during 2012.
In the past it was best known for its strong market share in the upper-middle to high end parts of the Philippines’ real estate market, but over the last couple of years it has managed to make solid inroads into the middle and lower-middle sectors too.
“It’s been able to transform itself into a much more dynamic and aggressive property company. Before it was relatively content with its market segment but now its captured market share on some of its non-traditional markets,” said one analyst.
This is due in part to the company’s CEO Antonio Aquino, who took over the management of Ayala Land in 2009. He proposed the change of strategy, and 2012 has witnessed a clear follow through on his vision.
Ayala Land is pursuing what it terms a 5-10-15 plan, in which it aims to have achieved PHP10 billion in after-tax net income and a return on equity of 15% by 2014. According to analysts it is on track to achieve these targets and has consistently registered profit growth of over 20% each quarter since Aquino took over in 2010, with margin improvement steady across all business lines.
Furthermore, in July it raised PHP13.6 billion through a private placement of 680 million common shares at PHP20 per share, in the largest overnight placement by a real estate company in Southeast Asia since 2005, as well as the largest ever overnight placement in the Philippines.
According to chairman Fernando Zobel de Ayala, the proceeds will be used to fund the company’s next phase of expansion, which includes development in Makati City and other parts of Metro Manila.
This will be aided by a planned joint venture with Ignacio R. Ortigas to develop the Ortigas’s Greenhills Landbank through OCLP Holdings, which will provide the company with access to around 55 hectares of properties in Metro Manila.
Average monthly sales take up in the first nine months of 2012 was almost 50% higher than the same time-frame in the previous year. The company’s stock also rose from is also up 50% this year, from PHP15.28 on January 2 to PHP23.9 on December 3, outperforming gains of 25% across the broader market according to Bloomberg data.
BEST EXECUTIVE
Antonio Aquino, CEO, Ayala Land
Antonio Aquino took over from Jaime Ayala as CEO of Ayala Land in 2009. Since then he has transformed the company from a large, sleepy property company to one that is growing as fast as some of the smaller companies in the Philippines, according to commentators.
“Often when CEOs come in they say this and that, [but] Aquino was really able to inject new energy into Ayala land and increase the scope of this company. There is really a transformation happening and he’s worked hard for that and is also carrying the support of his team,” said one analyst.
Aquino is no stranger to Ayala Land. He worked for the company until 1997 when the Ayala Group transferred him to Manila Water, which he ran until he was moved back to Ayala Land.
Many hold him responsible for the success of Manila Water, which expanded its distribution system from less than a million to more than five million people under Aquino’s leadership, while shareholder value was improved by more than 10 times.
At Ayala Land he has pursued a similarly aggressive strategy, expanding the scope of the firm to include the lower-middle segments of the market on the retail side.
“During Antonio’s watch it [Ayala Land] has embarked on a record number of product launches, developments, and he also spearheaded a number of key acquisitions including the most recent, Food Terminal Inc. [in August], one of the largest they’ve made in years.”
This is all despite the fact that Aquino is already two years beyond retirement age, but Ayala Group has asked him to remain in charge, testifying further to the positive impact he has had on Ayala Land.
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