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By: Marvin Germo | August 8, 2018


While there’s a tough competition in the real estate industry, two property developers take the stoplight as it reaps good income growth in the first few months of operations this 2018. You ask: Who are these companies? Well, this comes out as to no surprise; none other than SM Prime Holdings, Inc. (SMPH) and Ayala Land Incorporated (ALI). The two companies have been in competition for a couple of years now and both have undeniable good returns. This year, both logged a good percent of net income growth for different reasons.

Catch me in my live training events! (quick plug)

The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.

Stock Smarts Iloilo – August – 12, 2018
Stock Smarts Manila —  September 1, 2, 15, 16 & 30 2018
Stock Smarts General Santos – October 6 – 7, 2018
Stock Smarts Cebu —  October 27 – 28, 2018
Stock Smarts Taiwan – November 3
Stock Smarts Davao — November 10 – 11, 2018
Stock Smarts Dubai —  November 16 – 20, 2018
Stock Smarts Singapore —  November 28 – December 2, 2018

In the first half of 2018, SMPH already reported a net income of P16.62 billion which is a 16% profit growth driven mainly by two reasons: provincial expansion of its malls and higher demand for residential properties. Its consolidated revenue also went up by 15%. SMPH is currently focused on its expansion projects in the provincial areas of the country hence it was able to maintain a double digit growth in its businesses.

As for ALI, its net profit grew by 18% in the second quarter of 2018 while revenue gained 25% which is P80.4 billion which is more than one-third compared to the same period last year. The growth from the company came from various sources, mostly from residential, office, mall and other businesses. Growth has been seen across all its product lines leading to a surge of its revenue in this period and the company is optimistic it will be able to maintain this growth even more when backed up by good fundamentals.

While both companies were able to experience double digit growth in its revenue for the given period, each of them has different reasons for its success. First, SMPH’s shopping mall business accounted for 58% of its total revenues and this actually increased by 12%. This means the company should be geared into working more on this segment so as to maximize its revenue making potential.

As for ALI, their rental revenues grew by 13% which was mostly due to same-mall sales and contribution from newly-opened and expanded malls. The company’s revenue earned from residential lots and units, office spaces, and commercial and industrial lots grew by 27% while its commercial and industrial lot sales grew by 16%. Also, their reservation sales grew by 17% amounting to P72 billion.

As of June 2018, SMPI has 77 malls – seventy (70) in the Philippines and seven (7) in China. Recently, there were three (3) malls that opened recently and these were: SM Center Imus in Cavite, SM City Urdaneta Central in Pangasinan and SM City Telebastagan in Pampanga. For ALI, it launched five (5) residential projects: the Residences at Azuela Cove in Davao, Ceril Phase 4 and 5 in Laguna, Callisto Tower 2 in Circuit Makati, Ametta Place Phase 3 in Pasig, and Avida Towers Abreeza Tower in Davao.

Both companies already have pipeline projects on its sleeve and it’s not only for this year, but also in the upcoming years. SMPI will be opening malls in Albay and Leyte. It also plans to add 130, 000 sq. m. of office spaces at the Mall of Asia. As for ALI, it targets to generate revenue that will total to P20 billion from residential development and leasing segments by 2020.

New book and other books on Investing, Business and Finance.

I’m excited to share my 5th book overall and the 4th book in the Stock Smarts series, Stock Smarts: Breaking the Resistance – How to time your traders perfectly. The heart of this book is to teach you strategic ways on how to come in and buy and sell stocks in a way where you come as the market is headed up and come out as the market is headed down. The book is now out and exclusive via Marvin Germo Book Orders.
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