the Outsider - PSE Points to Ponder

 Monde Nissin Corporation reported continued pressure on its profit margins for the first nine months of 2025 as soaring edible oil prices weighed on its core branded food business, even as net income rose on cost initiatives and foreign exchange gains. The company’s gross margin slipped to 33.3% from 34.9% a year earlier, with its Asia-Pacific Branded Food & Beverage segment posting a sharper decline to 34.8% . Management attributed the drop to higher palm and coconut oil costs, which offset stable wheat prices and early benefits from price adjustments and cost-saving measures. “Commodity inflation remains a key headwind,” the company said in its quarterly filing, noting that while raw material requirements for 2025 have been secured, volatility could persist into 2026. Despite the margin squeeze, Monde Nissin booked a 9.6% increase in net income to ₱6.67 billion , supported by lower financing costs and a swing to foreign exchange gains. However, cash generation showed signs...

When China Banking Corporation filed its third-quarter report with the SEC this November, the headline number—₱20.23 billion in nine-month net income—looked reassuring. A 10% year-on-year increase in profit is no small feat in a year marked by global volatility and a domestic economy slowing to 4% GDP growth. But as always, the story behind the numbers is where the real insight lies. The Core Strengths China Bank’s core banking engine is humming. Net interest income surged 15.2% to ₱53.5 billion, powered by a 6.2% expansion in loans and an improved net interest margin of 4.58%. These are enviable metrics in a competitive market. Efficiency gains are evident too: the cost-to-income ratio improved to 45% from 48%, signaling disciplined expense management even as the bank invests in technology and talent. Asset quality remains a bright spot. Non-performing loans are steady at 1.6%, and coverage is a robust 123%. Capital ratios—CET1 at 14.97% and total CAR at 15.85%—comfortably clear re...

Shakey’s Pizza Asia Ventures Inc. (PSE: PIZZA) has long been a household name in the Philippines, and its latest quarterly filing shows why: systemwide sales surged 14% to ₱17.7 billion , and net revenue climbed 12% to ₱11.24 billion for the first nine months of 2025. On the surface, this looks like a victory lap for a brand celebrating its 50th year in the country. But dig deeper into the numbers, and a more nuanced story emerges—one of growth bought at a price . The Expansion Gamble Shakey’s is in the middle of an aggressive rollout, adding new stores, renovating existing ones, and expanding its multi-brand portfolio, which includes Peri-Peri Charcoal Chicken and Potato Corner. This strategy is designed to cement its dominance in casual dining and kiosks, but it comes with short-term pain . The company’s gross margin slipped to 22.6% from 24.3% , and operating margin fell to 8.9% , despite double-digit revenue growth. Why? Pre-opening costs and renovation expenses —the unavoida...

  The Weekend Read from the Trading Desk : How upstreaming First Gen’s proceeds to First Philippine Holdings could stabilize ABS‑CBN—and safeguard the conglomerate’s access to bank capital. The moment that changed the calculus When Prime Infrastructure Capital, Inc. reached financial close on November 17–18, 2025, for its ₱50‑billion purchase of a 60% stake in First Gen Corporation’s (FGEN) Batangas gas platform—spanning the Santa Rita, San Lorenzo, San Gabriel, Avion plants and the offshore LNG terminal—the news cycle framed it as an energy transition milestone. But the deal also cracked open a once‑in‑a‑decade capital window for the Lopez Group : with liquidity crystallized at FGEN, the conglomerate can channel cash upstream to First Philippine Holdings (FPH) and redeploy it where reputational risk is highest— ABS‑CBN .  Prime Infra’s majority control across the mid‑stream and downstream gas value chain complements its upstream Malampaya operations, while FGEN retains...

  Asia United Bank (AUB) closed the third quarter of 2025 with a headline that would make any banker proud: ₱9.37 billion in nine-month net income , up 9% year-on-year , and a balance sheet that swelled to ₱417 billion . Loans surged 29% , deposits climbed 19% , and capital ratios remain comfortably above Basel III floors. On paper, it’s a picture of resilience and ambition. But beneath the glossy numbers, there are pressure points investors and industry watchers should not ignore. Margins under strain. AUB’s net interest margin slipped to 5.0% from 5.3% a year ago. Why? Deposit costs jumped 35% , while yields on securities fell 12% . With the Bangko Sentral ng Pilipinas cutting reserve requirements earlier this year, liquidity is abundant, competition is fierce, and repricing gaps are widening. For a bank that thrives on spread income, this is a structural headwind. Trading gains: friend or fickle? Non-interest income helped cushion the margin squeeze, rising 18% for the nine...

Puregold Price Club, Inc. (PGOLD) has once again demonstrated its resilience in the Philippine retail landscape, posting a net income of ₱7.3 billion  for the first nine months of 2025 , up 5.6% year-on-year . Sales surged 10.6% to ₱168.1 billion , powered by aggressive store expansion and steady same-store sales growth. Yet behind the headline numbers, a closer look at the company’s latest SEC filing reveals operational pressure points that could shape its trajectory into 2026. The Good News: Scale and Margins Hold Puregold’s top line benefited from the full-year impact of 2024 openings and 174 new stores launched in 2025 , including one S&R warehouse. Same-store sales growth was healthy: Puregold +4.8% , S&R +5.4% , signaling consumer stickiness despite inflationary headwinds. Gross margin improved to 18.7% from 18.2% , thanks to supplier rebates and scale efficiencies. Operating income rose 8.2% to ₱11.3 billion , though operating margin slipped slightly to 6.7% ....

  Philippine National Bank (PNB) has delivered a headline that investors love: ₱18.5 billion in net income for the first nine months of 2025 , up 22.9% year-on-year. Capital ratios remain fortress-like, with CET1 at 19.95% and CAR at 20.79% , well above regulatory floors. On the surface, this looks like a bank in peak health. But beneath the glossy earnings lies a story of structural vulnerabilities—issues that could weigh on liquidity, credit resilience, and ultimately, shareholder returns. Liquidity Compression: The Silent Stress PNB’s liquid assets plunged 26% year-to-date , from ₱222.2 billion to ₱164.4 billion. Liquidity ratios deteriorated sharply: liquid assets-to-total assets fell to 19% from 29% , and liquid assets-to-liquid liabilities slid to 24.4%. Deposit liabilities contracted by ₱22.2 billion , with time deposits down 5.5%. In a high-rate environment, shrinking liquidity buffers limit flexibility. Boards typically prioritize cash preservation over payouts when liqui...

BDO Unibank has long been the crown jewel of Philippine banking—commanding scale, profitability, and a valuation premium that peers struggle to match. But its latest quarterly filing and sector trends suggest that the next chapter may be more challenging than the last. The Margin Squeeze Begins The first red flag is in the funding mix. Current and savings accounts (CASA)—the cheapest source of funds—slipped from about 71.5% at end-2024 to 66.6% by September 2025. Time deposits surged by nearly ₱300 billion. This isn’t just a footnote; it’s a structural shift that raises funding costs. Combine that with the Bangko Sentral ng Pilipinas’ rate-cut cycle—policy rate now at 4.75% and likely heading lower—and you have a classic margin squeeze: loan yields fall faster than deposit costs. For a bank with ₱5.27 trillion in assets, even a 10–20 basis point hit to net interest margin (NIM) can shave billions off earnings. Consumer Credit: A Quiet Risk BDO’s consumer book is growing, but so a...

Manila Water Company, Inc. (MWC) reported a robust financial performance for the nine months ended September 30, 2025, driven by tariff adjustments and operational efficiencies across its concessions. Revenues climbed 9.1% year-on-year to ₱30.05 billion , supported by the third tranche of the approved Rate Rebasing tariff implemented in January. Despite a slight dip in billed volume in the East Zone, cost discipline helped sustain profitability. Net income attributable to the parent surged 25.4% to ₱12.67 billion , while EBITDA rose 14% to over ₱21 billion , improving the EBITDA margin to approximately 73%. Core net income, excluding one-off gains, grew 15% to ₱11.6 billion. The company also booked a ₱1.1 billion gain from the sale of its East Water investment in Thailand , boosting international contributions. Domestic operations outside Metro Manila delivered steady growth, with Visayas and Mindanao businesses benefiting from tariff adjustments and higher billed volumes. As of S...

Max’s Group, Inc. (PSE: MAXS), operator of iconic restaurant brands including Max’s Restaurant, Pancake House, and Yellow Cab, reported a 14% drop in net income to ₱160 million for the nine months ended September 30, 2025, compared to ₱186 million in the same period last year. The decline came as inflationary headwinds and higher financing costs weighed on profitability despite seasonal resilience and operational streamlining. Revenues slipped 2.8% year-on-year to ₱8.58 billion , while system-wide sales fell 3.8% to ₱13.2 billion. The group cited softer consumer sentiment and a smaller store footprint—566 outlets versus 626 a year ago—following its ongoing network rationalization strategy. Still, same-store sales growth reached 1.4% , supported by targeted value offerings and improved average daily sales, which rose 9.9%. Margins compressed as gross profit dropped 8.4% to ₱2.47 billion , with gross margin narrowing to 28.8% from 30.6% last year. EBITDA declined 9.1% to ₱983 million,...

Maynilad Water Services Inc., newly listed on the Philippine Stock Exchange, is emerging as a standout defensive play despite its capital-intensive nature. The company’s latest financial results and dividend policy highlight its resilience, long-term value proposition, and income potential that rival those of top-performing REITs. Defensive Profile Backed by Strong Results Maynilad operates in the water and wastewater sector—an essential service with stable demand across economic cycles. Under its Revised Concession Agreement (RCA), the company earns a fixed nominal 12% return on approved expenditures, with cost recovery guaranteed through tariff adjustments. The concession term, extended to 2047 , aligns with its legislative franchise, ensuring predictable cash flows for decades. Financial performance for the nine months ended September 30, 2025, reinforces this defensive positioning: Operating revenue: ₱27.65 billion, up 9.5% year-on-year, driven by wastewater revenue growth ...

Figaro Culinary Group, Inc. (FCG), the operator behind Angel’s Pizza and Figaro Coffee, reported steady revenues for fiscal year ending June 30, 2025, but its latest audited financial statements reveal mounting operational challenges that could weigh on future performance. Margins Under Pressure Despite a 4.1% revenue increase to ₱5.67 billion, gross margins slipped to 44.7% from 45.9% a year earlier. Rising delivery commissions—up 28% to ₱375.2 million—and higher store overhead costs contributed to the squeeze. Advertising spend was cut by nearly 29%, helping operating margins, but analysts warn that prolonged marketing pullbacks could hurt brand momentum. Debt-Fueled Expansion Raises Financing Costs The company’s aggressive store rollout drove property and equipment assets up 54% to ₱3.89 billion. However, this expansion came at a cost: loans surged to ₱1.52 billion, pushing finance expenses to ₱105.2 million, more than double last year’s figure. Net income remained flat at ₱629....

Manila Electric Company (MERALCO) reported a sharp increase in its consolidated debt to ₱213.4 billion as of September 30, 2025, more than double its year-end 2024 level of ₱94.8 billion . While the spike raised eyebrows among market watchers, the company emphasized that the borrowing spree is part of a deliberate strategy to fund income-generating assets and future-proof its energy portfolio. The surge stems primarily from a ₱75-billion term loan drawn in January 2025 and additional project financing at subsidiaries, including ₱25.2 billion for MTerra Solar’s 3.5-GWp solar and battery storage project . MERALCO also deployed significant capital for its ₱85.4-billion investment in Chromite Holdings , a joint venture that acquired stakes in the Ilijan and EERI gas-fired plants and the Linseed LNG terminal . “These are not idle investments,” the company noted. “They are already contributing to earnings and strengthening our generation footprint.” Indeed, equity income from associates...

Cebu City, Philippines — Metro Retail Stores Group Inc. (MRSGI) reported a slight improvement in profitability for the nine months ended September 30, 2025, as revenue growth was tempered by rising operating costs and a sharp drop in cash reserves. Sales and Revenue Performance Net sales climbed 4.1% year-on-year to ₱28.70 billion , driven by a 4.6% increase in food retail and 2.8% growth in general merchandise . Rental income surged 10.8% to ₱307.2 million , boosting total revenue to ₱29.0 billion , despite a 0.9% decline in same-store sales .  Margins and Expenses Gross margin held steady at 21.7% , but operating margin slipped to 1.63% from 1.81% last year as operating expenses jumped 8.7% to ₱6.06 billion . Higher utilities, personnel costs, and depreciation from new store openings weighed on profitability. Net income edged up 4.2% to ₱213.3 million , while finance costs rose slightly to ₱381.0 million . Liquidity and Cash Flow Cash reserves fell 69% to ₱711.5 ...

Cebu City, Philippines – Cebu Landmasters, Inc. (CLI), the VisMin real estate leader, delivered another quarter of resilient growth, reinforcing its position as one of the country’s fastest-expanding developers. For the nine months ended September 30, 2025, CLI posted ₱14.34 billion in consolidated revenues , up 13% on a comparable basis , and a net income of ₱3.10 billion , marking a 6% year-on-year increase despite a challenging macro environment. The company’s recurring income streams surged , with hospitality revenues doubling (+101%) and leasing income climbing 49% , underscoring CLI’s successful diversification beyond residential projects. Its hotel portfolio now spans four operational properties, including the newly opened Citadines Bacolod City , with two more hotels set to launch before year-end and six under construction—solidifying CLI’s future REIT ambitions. Residential demand remains robust, with reservation sales soaring 27% to ₱19.33 billion and an impressive 93% ...

Makati City, Philippines (Nov. 23, 2025) — Ayala Land, Inc. (ALI) is navigating a delicate balance between strengthening recurring income and mounting financing pressures as investors reassess the stock’s valuation and dividend appeal heading into year‑end. Trading snapshot (latest PSE prints) ALI has traded in a tight band around ₱19–₱21 over the past week. Recent closes include ₱19.36 on Nov. 19 , ₱20.05 on Nov. 20 , and ₱21.00 on Nov. 21 , reflecting choppy sentiment and heavier volumes around the company’s buyback executions. The 52‑week range now sits near ₱18.64–₱30.55 , underscoring the stock’s de‑rating from 1H peaks as macro and sector headwinds intensified. On Nov. 20 , ALI disclosed multiple buyback trades between ₱19.30 and ₱20.15 (3.0 million shares), a signal that management is willing to provide price support while executing its capital program.  Earnings and operating mix In its 9M 2025 filing, ALI posted ₱21.38B net income ( +1% YoY ) on ₱121.83B consoli...

From the Trading Desk. Shares the trading desk is selling, avoiding, and waiting to see if it corrects. Jollibee Foods Corporation (JFC) is the undisputed leader in Philippine quick-service dining. With over 3,400 stores locally and decades of dominance, JFC is a mature company by every textbook measure : High market penetration in its home market Stable cash flows from a loyal customer base Ability to pay consistent dividends —a hallmark of maturity In fact, one defining trait of mature firms is a high dividend yield , reflecting limited reinvestment opportunities and a shift toward rewarding shareholders. Yet JFC’s current strategy tells a different story. The Growth Narrative Instead of leaning into its maturity, JFC is chasing a growth-company image through aggressive acquisitions and international expansion. Tim Ho Wan (premium dim sum), Compose Coffee (South Korea), CBTL, Highlands Coffee, Smashburger—the list is long and expensive. These deals inflate goodwill (₱78.7B as ...

SSI Group, Inc. reported a sharp decline in profitability for the nine months ended September 30, 2025, as operating expenses surged despite flat revenue growth. The specialty retailer posted ₱639.8 million in net income , down 49.3% from ₱1.26 billion in the same period last year. Third-quarter earnings fell even steeper, dropping 65% to ₱188.1 million . Sales remained largely unchanged , inching up 0.7% to ₱20.32 billion , while gross profit improved slightly to ₱9.08 billion , with margins rising to 44.7% from 44.2% . However, operating income plunged 44.9% to ₱914 million as expenses ballooned. “The increase in costs was driven by store network expansion and technology investments,” SSI said in its quarterly filing. Operating expenses climbed 12.4% to ₱8.18 billion , fueled by higher rent, depreciation, and personnel costs linked to a 13.6% increase in selling space and the rollout of SAP and ETP enterprise systems . Selling and distribution costs rose to ₱6.58 billi...

STI Education Systems Holdings, Inc. (PSE: STI) delivered a robust financial performance for the quarter ended September 30, 2025, defying a slight decline in student headcount with a higher revenue mix and improved operating leverage. The listed education group reported ₱1.44 billion in revenues , up 39% year-on-year , driven by strong tuition collections and a shift toward higher-yield tertiary programs. Net income surged 135% to ₱619 million , while earnings per share doubled to ₱0.06 from ₱0.03 in the same period last year. Operating income soared to ₱657.5 million , driven by tight cost control and a 75% gross margin. EBITDA climbed to ₱878 million , translating to an EBITDA margin of 61% , underscoring the group’s efficiency gains. The upbeat results came despite a 4% drop in total enrollment to 132,941 students for School Year 2025–2026. Management attributed the decline to an earlier start of classes in public schools, which affected Senior High School intake. However, CH...

MANILA — Once hailed as pandemic darlings for their grocery and convenience retail models, MerryMart Consumer Corp. (MM) and AllDay Marts Inc. (ALLDY) have taken sharply different paths in 2025. Financial Scorecard: MerryMart posted a modest ₱21.3 million net income for the first nine months of 2025, up 2.9% year-on-year, despite a 6.8% dip in revenue to ₱5.36 billion. The company cushioned weaker sales with higher supplier rebates and trade supports, lifting gross profit by 8.7%. Operating margins remain thin at about 1%, but MM stayed in the black while continuing store upgrades and expansion. AllDay, by contrast, swung to a ₱86.99 million net loss as sales collapsed nearly 45% to ₱3.91 billion. Finance costs surged more than 270%, eroding operating gains and leaving interest coverage at a precarious 0.19x. Management has reallocated IPO proceeds to working capital and hinted at network rationalization to stem the bleeding. Balance Sheet Snapshot: MM carries heavy leverage...

MANILA — November 19, 2025 — ABS-CBN Corporation is fighting to stay afloat as mounting overhead costs and a shrinking cable business weigh heavily on its financial health, according to its latest quarterly filing with the Securities and Exchange Commission. The media giant posted a ₱2.24 billion net loss for the first nine months of 2025 , an improvement from last year’s ₱2.59 billion deficit, thanks to cost-cutting and stronger content revenues. However, General and Administrative Expenses (GAEX) of ₱3.92 billion still dwarf its gross profit , underscoring the structural challenge of sustaining operations without its former broadcast franchise. Liquidity remains a pressing concern. Cash reserves fell to ₱718 million , while current liabilities ballooned to ₱24.1 billion , leaving the company with a current ratio of just 0.54× . Interest-bearing debt stands at ₱12.9 billion , and interest coverage remains negative, signaling continued reliance on asset sales and lender negotiation...