Who are the Lopezes

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source: http://kapamilyaonesite.blogspot.com

Ever heard of ABS-CBN, SkyCable, BayanTel, First Philippine Holdings, FGEN, EDC, Meralco, and BayadCenter?

source: http://www.libros.com.ph

 

These are among the businesses run by the Lopez family. Started by Eugenio Lopez, Sr. after the second World War, he joined the budding broadcasting industry when he established Chronicle Broadcasting Network(CBN). Later on he was able to acquire Alto Broadcasting System and renamed the company ABS-CBN Broadcasting Corporation. Also Eugenio Lopez, Sr. together with other Filipino investors acquired Manila Electric Company which now known as Meralco.

From then on the business was continued by his children  Geny(Eugenio Lopez, Jr.), Oscar, Manolo, Presy, and Robby.

There business is composed of diversified interest in various industries at the same time coupled with various foundations to continue the legacy of Don Ening(Eugenio Lopez, Sr.). 

Eugenio Lopez, Sr. is not only well known because of the businesses he built but also he is known as one of the country's model philanthropist. 

Quoting his words :

The old business tenets have given way to the modern concept, which is not based on profits alone, but rather on the service it can render and the contribution it can make to the prosperity and progress of the nation as a whole.  

Below is  a list of their business(source: Wikipedia.org)

Parent Companies

Lopez Inc. - is a private holding company of the Lopez Family which owns 52.6% of Benpres Holdings Corporation which will be renamed as Lopez Holding Corporation after the approval of the stockholders during their annual stockholders meeting this June 2010. Headed by Presentation Lopez-Psankis.

Lopez Holdings Corporation (formerly Benpres Holdings Corporation) - Lopez Holdings was incorporated in 1993 by the Lopez family to serve as the holding company for investments in major development sectors such as broadcasting and cable; telecommunications; power generation and distribution; and banking. It added to its portfolio, investments in other basic service sectors but has since sold its interest in banking, toll roads, information technology, property development and health care delivery. Lopez Inc. holds 52.6% of Lopez Holdings Corporation.

Selected businesses

Media and Telecommunications

ABS–CBN Corporation - is in the business of producing entertainment, news and information programs and in the continuous adoption of breakthrough technology to deliver these to its audiences not just in the Philippines, but globally through The Filipino Channel. This content is distributed primarily in the Philippines through its flagship station ABS-CBN Channel 2. Last May 2010, the board of directors and stockholders of ABS-CBN Broadcasting Corporation approved the dropping of "broadcasting" to its corporate name and changing it to ABS-CBN Corporation.

Sky Vision Corporation - or SkyCable was incorporated on March 25, 1991 and started commercial operations on February 1, 1992. The economic interest of Benpres in Sky Vision stood at 65.3% as of December 31. 2008. Sky Vision owns and operates cable television service providers which offer the brands SKYCable and SunCable. The major cable companies under Sky Vision are Sky Cable Corporation (formerly Central CATV, Inc.) for Metro Manila and Pilipino Cable Corp. for 22 provincial systems nationwide.

Bayan Telecommunications Holdings Corporation (Bayan Holdings) - owns Bayan Telecommunications, one of the telecommunications company in the Philippines providing a full range of services which includes local exchange, domestic long distance, international long distance, data services and payphone services. As of December 31, 2008, Benpres held 69.1% Bayan Holdings.

Power and Energy

First Philippine Holdings Corporation - First Philippine Holdings Corporation (First Holdings) is a holding company whose core businesses are in power generation and distribution, with strategic initiatives in manufacturing, property and infrastructure.

Power generation

First Gen Corporation - is the holding company of First Holdings in power generation and energy related businesses. First Holdings owns 67% of First Gen.
    
First Gas Holdings Corporation - First Gas Holdings Corporation (FGHC) is the holding company for the development of gas-fired power plants and other non-power gas related businesses. FGHC is 60% owned by First Gen and 40% owned by BG Consolidated Holdings (Philippines) Inc.
    
FGP Corp. - FGP is 60% owned by Unified Holdings Corp. of First Gen. and 40% owned by BG Philippines Holdings, Inc.
    
FG Hydro Power Corporation -First Gen Hydro Power Corporation (FG Hydro) was incorporated as a wholly-owned subsidiary of First Gen.
    
FG Bukidnon Power Corp. - First Gen Renewables, Inc. (FGRI), formerly known as First Philippine Energy Corporation, was established in 1978 to develop prospects in the renewable energy market. First Gen owns 100% of FGRI.
    
Bauang Private Power Corporation- First Private Power Corp. (FPPC) was established in 1992 to engage in power generation as an independent power producer. FPPC is 40% owned by First Gen. Today, it owns 93.25% of Bauang Private Power Corporation (BPPC).
    
Energy Development Corporation - Energy Development Corporation (EDC), established in 1976,accounts for more than 60% of the country’s installed geothermal capacity. Its plants are located in the provinces of Leyte, Negros Oriental, Negros Occidental, Bicol and North Cotobato. n November 2007, First Gen Corporation bid for and won a 60-percent economic stake in EDC.

Power distribution

Meralco (previously Manila Electric Company) - bought in 1962, and developed into a power-distributing company. First Holdings, now owns 6.7% stake in the company after selling it's 26.6% stake to Pangilinan's led-MPIC and Pilipino Telephone Corp. last year.
    
PECO (Panay Electric Company) - First Holdings entered into a joint venture with the Panay Electric Company, Inc. (PECO) in March 1996 for the construction of a US 72 million diesel-fired power plant in Iloilo City. First Holdings acquired a 30 percent equity in PECO. In turn, PECO subscribed to a 30 percent equity interest in Panay Power Corporation. First Holdings currently owns 30% of PECO.


Property

Rockwell Land Corporation (RLC)- a high-end real estate development corporation initially tasked to developed the Rockwell Center in Makati City. Rockwell Land was established in 1995. It is currently owned by Meralco (51%) and First Holdings (49%). First Holdings is in talks with the Meralco for the purchase of additional stake in RLC.
    
First Philippine Industrial Park - First Philippine Industrial Park (FPIP) is a 315-hectare industrial estate. FPIP is a joint venture with Sumitomo Corporation of Japan which owns 30% while First Holdings owns 70%, formed in 1996 to develop an industrial park located in Sto. Tomas, Batangas.
    
First Philippine Realty Corp. - formerly known as INAEC Development Corporation. It is primarily engage in the acquisition, disposal, or lease of real and personal property. FPRC is a wholly-owned subsidiary of First Holdings.

Infrastructure

First Balfour, Inc. -is one of the country’s largest engineering and construction companies today, with 40 years in business. First Balfour, Inc. is a wholly-owned subsidiary of First Holdings.
    
First Philippine Industrial Corp.- owns and operates the sole, largest commercial oil pipeline in the country, transporting crude and refined petroleum products from Batangas to Metro Manila. FPIC is 60% owned by First Holdings, in partnership with Shell Petroleum Co., Ltd. (UK) which owns 40%.

Manufacturing

First Philippine Electric Corp. (First Philec)

Philippine Electric Corporation (Philec)

First Electro Dynamics Corporation (FEDCOR)
    
First Philippine Power Systems, Inc. (FPPS)
    
First Sumiden Circuits, Inc. (FSCI)
    
First Sumiden Realty, Inc.
    
First Philec Solar Corporation

Bills Payments

CIS (Corporate Information Solutions) Bayad Center, Inc. - (CBCI) Originally known as the Payment Collection Service, a division of Corporate Information Solutions, Inc. (CIS) in May 1997. Orginally intended for accepting payments for Lopez companies and affiliates, it eventually catered other companies and services as well.

Social responsibility foundations and initiatives

Lopez Group Foundation
    
ABS-CBN Foundation, Inc.
    
ABS-CBN Bayan Foundation - formerly ABS-CBN Bayan Microfinance
    
Bantay Bata 163
    
Don Senen Gabaldon Foundation
    
Eugenio Lopez Foundation - formed in 1968 to give access to a private collection of books, artworks, and artifacts
    
The Lopez Memorial Museum
    
First Philippine Conservation - formed in 1999 to support Conservation International-Philippines
    
Knowledge Channel Foundation
    
Meralco Millennium Foundation
    
71 Dreams Foundation - headed by Fr. Tito Caluag, S.J.; it was formed to assist the families of the Wowowee stampede.
    
Save The La Mesa Watershed
    
Save the Pasig River
    
Lopez Lifelong Wellness

Former businesses

Maynilad Water Services - joint-venture between Benpres Holdings Corporation and Ondeo Water Services, Inc. (formerly Suez Lyonnaise de Eaux). Benpres left the joint-venture in 2006 in order to settle a debt of US$150 million.
    
The Medical City - in April 2008, Benpres sold entire its 18% stake in The Medical City to Lombard for Php600 million.
    
Tollways - in 2008, First Philippine Infrastructure Development Corporation and Manila North Tollways Corporation were sold to Metro Pacific Investment Corporation.
    
Philippine Commercial International Bank - a joint venture between Benpres and JG Summit Holdings. Both sold their shares in 1999 which gave way to the Equitable PCI Bank merger and eventually became Banco de Oro Universal Bank.

My Personal Analysis: Energy Development Corporation

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source: http://www.energy.com.ph/

Energy Development Corporation (EDC) is the Philippines's pioneer and leading geothermal energy generator for the past 30 years. This Lopez led company which was formerly under PNOC has tapped the Philippines's renewable energy source. 

EDC is primarily engaged in geothermal exploration and development. Other areas of their operation includes Reservoir Engineering and Management, Steamfield Commissioning, Operations and Maintenance, Environmental Management, Energy Research and Development, Project Planning and Construction and

Engineering Design

EDC also has a subsidiary in Chile, EDC Chile Limitada, to bag possible contracts to build and operate geothermal plants in Chile. An excerpt from BusinessWorld states that EDC has extended Letters of Credit amounting to $80 million for financial support(click here to read the entire article) 

Looking at EDC's 10 year price graph it shows a remarkable cup and handle formation:

 Below is the one year price graph:

 

Graphs source: www.citiseconline.com

The cup and handle formation may indicate an expected uptrend in the coming weeks or months. A short rise in price was noted after the handle formation. The price of EDC has been up for the past two weeks and expectation of an uptrend will be seen in the coming days or weeks.

Notable news about EDC are their recent bagging of 7 power supply contracts  with electric cooperatives in Leyte and Negros and the 31% increase in net income for FY 2010. Also EDC has recently issued a $300 million bond to support their expansion projects(click here to read full story).

Looking at EDC fundamentally, current ratio is at a healthy 1.97 indicating liquidity primarily due to proceeds of bond offering and settlement of Yen denominated loans. Due to the nature of the industry the company has a Debt to equity ratio of 1.28 indicating that the company is leverage by using debt to finance expansion projects.  

Net income as compared to last year increase by 31% due to increase of electricity sales. PE ratio TTM(trailing twelve months) is at 27.56 against industry of 7.42 while Price to Book Value MRQ(Most Recent Quarter) is at 3.71(source reuters.com) this indicates that the EDC share is at a level we can say that is not overprice nor underprice. With the recent expansion programs which are likely to materialize due to approval of long term loans, EDC's price has been seen by analyst to go up in the coming weeks. With the latest developments in EDC, investors are now unto it thus a high PE ratio is generated.

Below are screenshots of EDC's FY2010 reports.

source:http://www.energy.com.ph/investor-relations/financial-reports/

In my opinion EDC is a good buy for the long term. The energy sector is one of the things that is necessary in the growth of the country and use of renewable energy is now preferred due to the latest nuclear crisis in Japan. Current projects and expansion programs of EDC are seen as potential for the next years thus recommendation for it is for long term. 

Again this is just my opinion as always TRADE AT YOUR OWN RISK. 



PS. To read more technical analysis of stocks check my beloved's blog www.beautifulmantra.blogspot.com

Analyzing two companies of the same industry

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source:http://getyourbizsavvy.com/

 

The best way to determine whether one company is better than the other is by comparing one to another company of the same industry.

For illustration purposes lets look at ABS and GMA7, Philippines top channels.

ABS   GMA7  Closing Price 08/06/2010             45.30           5.95 EPS               2.23           0.58 P/E %             20.36         10.26 52 week range  25.50-45.30   5.60-8.80  Par               1.00           1.00 2009 Income  1.7B   2.8B  Board Lot           100.00       100.00

Based on the data above one can make decision which stock to buy.

If you look at the two there is a huge difference in the price. Higher EPS indicates two things, one is that the other company has a bigger net income and the other company may have a smaller number of shares outstanding. As you compare GMA7 has a higher net income than ABS but ABS has higher EPS meaning ABS has a smaller number of shareholders...meaning the income is shared by a smaller number of people. P/E % of ABS is higher than GMA7 which might indicate that more people have confidence in ABS but it also means because of this confidence level ABS might be overpriced as compared to GMA7.  With these bits of info one can decide which to invest in. One pointer is that both companies are doing well... both has a high P/E %, Price range is wide meaning catching either stock at its lowest could possible go up again to that high level giving you profit when the timing is right. The only decision point now will be how much free money can you put in. If you have a limited fund GMA7 might be a better stock to buy but if funds are handy go for ABS. Again the above simple analysis are just sample analysis. Every person has his own way of looking at the data. Others rely on Technical Analysis which is a price change based analysis which is studying the price trend and looking at the buy and sell indicators.