Ayala Land, Inc., one of the major real estate developers in the Philippines, plans to strengthen its hold on Prime Orion Philippines, Inc. (POPI)–a logistic and industrial developer that has a major interest in real estate, property development, warehouse leasing and non-life insurances. On Monday, February 4, 2019, the company disclosed to the stock exchange that the purchase of 20% equity of Laguna Technopark, Inc. has been approved by its executive committee. If converted into figures, this equity is equivalent to P800 Million or 8,051 common shares. Ayala is planning to exchange this value for 323.89 Million equivalent common shares in Prime Orion.
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Ayala is seeing a bright future ahead of this logistic and industrial developer. By buying more of its shares, the company wants to make POPI as “the leading real estate logistics and industrial estate developer and operator” in the country. Sooner or later, POPI will be one of the strongest estate arm of Ayala.
POPI, incorporated in 1989, is a listed logistic and industrial firm which currently owns the Tutuban Center in downtown Divisoria–a popular mall that offers wholesale and retail merchandises to locals and foreigners. It’s immediate holding companies are Orion Land, Inc., Orion I Holdings Philippines Inc., and OE Holdings, Inc. POPI, together with its holding company Orion Land, takes over the management of Tutuban Center while continuously revitalizing and upgrading the facilities and buildings of the said mall. At present, POPI owns two industrial parks located in Cagayan De Oro and soon in the Central Luzon that will provide 42 7,000-SQM cuts of lands. Just recently, the company set aside P1 Billion for the development of the Standard Factory Building that can soon store more than 60,000 SQM area with 40 units having a size of 1,200 to 1,500 SQM per unit. This will be located in Laguna Technopark. Numerically speaking, the 2018 income of POPI was 122% higher than 2017, P189.47 Million in figures during the first 3 quarters of the year and even went up to 328% which was P1.4 Billion in the last quarter.
Ayala was able to acquire the Tutuban Center operator back in 2015, with a starting share of 51.36%. And because it was a success for the company deciding to purchase almost half the stake of POPI, the share increased to 54.91% until it reached 63.9% in the last month of the first quarter of 2018. With a significant stake in POPI, the attributable income of Ayala rose to P20.78 Billion, 17% higher than 2017, during the first 9 months of 2018. It eventually climbed to 21%, allowing P199.68 Billion of gross revenues.
The stock has been consolidating for the whole of 2018 up until now. It’s currently trying to breakout of the resistance at 2.8. Failure to breakout would make the stock just retrace to 2.55 to as low as the support at 2.2.
However if the stock breaks out from 2.80, it has a shot to go to 3.3 to as high as 3.90.