PSE Stock Bagger in Cement Sector for the year 2019 to 2020 – HLCM

$HLCM update 21 February 2019, Holcim completes La Union expansion ahead of schedule.

Holcim Philippines’s early completion of its La Union plant upgrades strengthens its ability to support the development of fast-growing north Luzon.

La Union to increase the annual cement production capacity there by 80% to around 1.8 million tons.

The La Union plant upgrade is part of the first phase of Holcim Philippines’s expansion program. The second phase involves improvements to its Bulacan and Misamis Oriental plants amounting to US$ 300 million to raise the company’s annual cement production capacity by 30% to 13 million metric tons by 2020.

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Meanwhile, cement consumption in the Philippines is estimated to have reached ~30Mil MT, while local production is at 26.0Mil MT in 2018.

Cement Demand by 2019: 30 Million MT (Estimated)
Cement Production Supply by 2018: 26 Million MT

Deficit: 4 Million MT

This supply deficit situation is expected to persist in the medium term due to the growing construction activity in the country.

HLCM could be valued at a premium to Holcim Indonesia

HLCM Indonesia: EV / EBITDA P18.4

 

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Potential buyers

Among the major players in the local cement industry, we believe EAGLE is in the best position to bid on HLCM given its healthy balance sheet with a net cash position of Php8.1Bil as of 9M18.

Note however that the company also has some expansions in the next few years that require funding.

A more likely scenario is for EAGLE to bid selectively on HLCM’s facilities in Mindanao, as this would allow the company to accelerate penetration of the VisMin area.

Other potential bidders may include DMC and Phinma, which
have previously shown interest in entering the cement industry. As of writing, only EAGLE’s Chairman and SMC President Ramon Ang has expressed interest in bidding for HLCM.

 

20190208-CEMENT SECTOR

Bodegero : Top 7 Buyers (Buying only 3.613 Million shares volume, a total value of P32Million pesos).

Huge volume buying price at P9.50, and buying average at P8.40 to P9.47.

 

Bodegero: Top 7 Buyers without selling
Bodegero: Top 7 net buyers without selling (Buying only 3.613 Million shares volume)

Tsupitero: Top sellers (No buying activity, Volume 315,300 shares, a total value of P2.757 Million pesos).

Average price selling at P9.00 to P9.57

Tsupitero: Top 12 sellers without buying
Tsupitero: Top 12 net sellers without buying (Selling only volume 315,300 shares)

 

Holcim Philippines, Incorporated Monthly Chart – Uptrend

1 – MACD crossover started

2 – Stochastic RSI (Blue line) crossover started

3 – Huge volume spike from last month (January) a total of 47.11 million shares traded, and the latest volume this month (February 21st ) a total of 37.3 million shares traded.

Uptrend Holcim Monthly Chart as of Feb 21, 2019, MACD crossover + Stock RSI (Blue line) crossover)

Top 20 buyers activities from 17 January to 21 February 2019.

Top 20 Buying (Cross trades)
Top 20 Buying (Cross trades)

 

Top 20 sellers activities from 17 January to 21 February 2019.

Top 18 Selling (Cross trades)

Result:

Despite of huge shares selling activities, the bulls protected the price at P9.50, as shown in the data there are Top 7 Buyers willing to buy at the price range P9.00 to P9.50 (Buying only 3 Million shares volume, a total value of P32 Million pesos) at average buying price P8.40 to P9.50 pesos.

Volume Net Buyers and Net Sellers
Volume Net Buyers and Net Sellers – Buyers Dominated

Initial TP: P16.96

Bonus finish line price: P18.4 (as per COL disclosure HLCM Indonesia, EV / EBITDA)

Copyright © 2019 The God’s Work to Abandoned Son. All rights reserved.

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