DMC: Sideways with an Upward Bias

After reaching its peak in May last year, DMC has been moving sideways for almost a year. 2012 earnings remain flat as lower prices for coal and nickel, and the rehab of SEM Calaca's other unit take their toll on the earnings. For 2013, the outlook for coal and nickel prices remain to be week, and any increase in the earnings of its electricity business will be offset by the lower earnings due to decreased ownership in Maynilad. However, with the growth of its real-estate and construction businesses, DMC may soon rejoin the bullishness of its fellow holding companies. Though price movement would be painfully slow, the Mokong bought DMC because of low downside risk. Hopefully its 2nd Quarter earnings would provide a positive surprise.

Net Income After Non-Contolling Interest, Php M
Business	2012	2011	Growth	2013 Earnings Outlook
Coal	1,739.00	2,379.00	-27%	Flat with an upward bias due to increased Coal Consumption of SCC's Power Plant
Nickel	341.00	917.00	-63%	Flat
Construction	1,220.00	1,117.00	9%	Positive Growth: PPP, SLTEC unit 2, SCC's Power Plant Expansion
Real-estate	2,182.00	1,795.00	22%	Positive Outlook for the Property Industry due to lower lending rates
Electricity	1,902.00	1,177.00	62%	Increased Generation due to completion of Power Plant Rehab
Water	2,264.00	2,195.00	3%	Decreased earnings due to divestment
Parent and Others	144.00	15.00	860%	Minimum impact to DMC's bottom line
Total	9,792.00	9,595.00	2%	2013 earnings will be flat with an upward bias

DMC's Boring Chart

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COMPARISON OF HOLDING COMPANIES
(Data form Bloomberg)

Stock	Last Price	Market Cap, Php B	Report	PE	P/B	ROE
AEV	57	314.75	2013:Q1	12.67	3.44	27%
AGI	26.45	271.64	2012:A	19.45	3.18	16%
DMC	59.6	158.27	2012:A	16.15	3.91	24%
GTCAP	860	149.90	2012:A	19.43	2.75	14%
JGS	48.5	329.66	2012:A	24.37	2.12	9%
LTG	25.55	270.35	2012:A	28.08	4.91	17%
MPI	6.18	160.78	2013:Q1	23.77	1.91	8%
SM	1160	728.61	2013:Q1	27.58	3.84	14%
SMC	123	292.69	2013:Q1	15.63	1.21	8%