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The Peak That Was—and the Floor That Held: Why SMPH Fell the Least


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In every property cycle, prices don’t just move on earnings—they move on what investors believe those earnings are. In the Philippine listed-property trio of SM Prime (SMPH), Ayala Land (ALI), and Megaworld (MEG), the post‑peak story is a study in cash‑flow durability and balance‑sheet optics. What’s striking is not simply that all three are below their highs—it’s that SMPH’s decline has been the shallowest, suggesting the market treated it as the most “defensive” of the group. 

Let’s start with the scoreboard. Based on widely-referenced price histories, MEG hit ₱6.54 on July 15, 2019, and SMPH peaked at ₱43.35 on January 3, 2020—both cited as all‑time highs by TradingView. For ALI, a readily cited peak reference from MarketScreener is a 10‑year high of ₱53.85 (MarketScreener labels it as a 10‑year extreme rather than explicitly “all‑time”). As of late December 2025, pricing snapshots: MEG traded around ₱2.04, SMPH around ₱22.20, and ALI around ₱21.30. 

That puts the drawdowns (peak → recent) roughly at:

  • MEG: about ‑69% (₱6.54 → ₱2.04) 
  • ALI: about ‑60% (₱53.85 → ₱21.30) 
  • SMPH: about ‑49% (₱43.35 → ₱22.20) 

Numbers don’t tell you why—but financial statements do.

The Defensive DNA: SMPH Sells Time, Not Timing

At the heart of SMPH’s relative resilience is a simple proposition: SMPH monetizes “space and time” (rent), while the others still monetize “timing” (unit sales and project cycles) more heavily. In SMPH’s 9M 2025 results, rent revenue was ₱60.99B out of ₱103.40B total revenue—about 59% of the top line. Its segment disclosure reinforces that the machine is primarily the malls engine: malls revenue alone was ₱60.92B for the same period. 

Contrast that with ALI’s mix: ALI’s disclosed breakdown shows Property Development around ₱75.9B (~63%), with Leasing & Hospitality around ₱35.1B (~29%) for 9M 2025. MEG, meanwhile, posted rental income of ₱16.24B out of total ₱64.41B (about 25%) in 9M 2025. 

That mix matters. When rates rise or consumer confidence wobbles, markets punish the “timing” businesses first—because pre-sales, take-up, and completions are easy to delay. Rent, by contrast, is the closest thing property has to subscription revenue: occupancy can soften at the margin, but the underlying cash flow is typically more stable. SMPH, by sheer composition, looks more like a recurring-income compounder than a cyclical developer. 

Balance-Sheet Gravity: Investment Properties as a “Visible Floor”

SMPH also carries the largest investment property base among the three, which can anchor valuation because it provides a tangible “asset backing” narrative. SMPH’s investment properties stood at ₱649.31B as of September 30, 2025 (up from ₱601.34B at year-end 2024). The filing notes that SMPH uses the cost model for investment properties but discloses fair value; in the same summary, investment properties fair value is cited at roughly ₱2.48T.

ALI’s investment properties are sizable but smaller: ₱282.13B as of September 30, 2025. MEG’s are smaller still at ₱151.49B (September 2025). 

This doesn’t mean SMPH is automatically “cheaper” or “safer.” What it does mean is that the market has an easier time imagining a NAV‑anchored valuation for SMPH: you can point to a deep pool of leased assets, a disclosed fair value, and a rent stream that feeds those assets. In a selloff, that often creates a psychological and analytical “floor,” limiting drawdowns relative to companies where value is tied more to future project execution. 

Cash Flow: Scale and Predictability Beat Cyclicality

Here’s perhaps the most underappreciated reason SMPH held up best: operating cash flow scale.

  • SMPH net cash provided by operating activities: ₱53.07B (9M 2025) 
  • ALI net cash provided by operating activities: ₱18.47B (9M 2025) 
  • MEG net cash from operating activities: ₱18.39B (9M 2025) 

SMPH also spends heavily—net additions to investment properties were ₱57.43B in 9M 2025—meaning free cash flow after capex can look tight in a single period. But investors often care about capacity: SMPH demonstrates it can generate very large operating cash flow, and that reinforces confidence that the company can fund reinvestment, service debt, and maintain dividends across cycles. 

ALI and MEG can generate strong profits too, but the working-capital and inventory mechanics of development-heavy models create more “lumpiness” in cash conversion. ALI, for example, carries very large inventories and receivables consistent with development cycles (inventories ₱237.89B, accounts/notes receivable ₱112.26B current at Sep 30, 2025). MEG similarly balances real estate sales, contract assets, and inventories—again typical for developers—while rent is a smaller share of the whole.

When markets are nervous, they pay a premium for cash-flow visibility—and SMPH’s statements show the strongest visibility at the operating cash level. 

Debt Optics: “Coverage Comfort” vs “Cycle Risk”

SMPH’s debt isn’t small, but its earnings and cash flow profile makes the debt feel more “serviceable.” SMPH reports interest expense of ₱8.88B in 9M 2025, alongside indicators in the filing summary like interest coverage around 7x. ALI’s financing charges are heavier relative to coverage comfort: ALI’s interest and other financing charges were ₱12.71B in 9M 2025 and the filing summary references an interest coverage ratio of 4.92x.

MEG’s leverage looks conservative (debt-to-equity ~0.35 per its filing summary), but its equity still behaves more cyclically because its revenue mix remains more tied to real estate sales timing than SMPH’s mall-rent annuity. In other words: lower leverage doesn’t automatically translate to lower drawdown if earnings are perceived as more cyclical. 

So Why Did SMPH Decline the Least?

Put the pieces together and you get a coherent market narrative:

  1. Most recurring revenue: Rent is the backbone (≈59% of revenue). 
  2. Largest leased asset base: Investment properties at ₱649B with disclosed fair value creates an asset-backed floor. 
  3. Largest operating cash flow: ₱53B OCF in 9M—scale matters in stress. 
  4. Better “bond-like” characteristics: A rent annuity is often valued more defensively than development cycles. 

That’s why, even though all three are below their peaks, SMPH has worn the smallest bruise.

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