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Top Story:: WED 16 APR 2025

SSI reported strong earnings for 4Q24, with profits of Php1.2Bil, an 18.4% increase year-on-year, driven by robust sales in the Luxury & Bridge segment. The local equities market saw a fifth consecutive day of gains, with the PSEi rising 0.66% and the Peso strengthening against the US dollar. Additionally, personal remittances from Overseas Filipinos grew by 2.6% year-on-year in February 2025, reaching USD$3.0Bil.

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14 views3 pages

Top Story:: WED 16 APR 2025

SSI reported strong earnings for 4Q24, with profits of Php1.2Bil, an 18.4% increase year-on-year, driven by robust sales in the Luxury & Bridge segment. The local equities market saw a fifth consecutive day of gains, with the PSEi rising 0.66% and the Peso strengthening against the US dollar. Additionally, personal remittances from Overseas Filipinos grew by 2.6% year-on-year in February 2025, reaching USD$3.0Bil.

Uploaded by

Steve Hatol
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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WED 16 APR 2025

Top Story:

SSI: Earnings beat on strong 4Q24 sales and margins

News Highlights:

CEB: 1Q25 passengers increase by 26.4% y/y


MER: Franchise is renewed for another 25 years
Economy: Personal remittances grow by 2.6% y/y to USD$3.0Bil in February 2025; cumulative level reaches USD$6.3 Bil

Market Summary:

The local equities market extended its winning streak to a fifth straight session on Tuesday, mirroring gains across most Asia-
Pacific markets. This also follows an overnight rally on Wall Street after the US granted a temporary reciprocal tariff exemption
on consumer electronics. Meanwhile, the Peso strengthened to a near six-month high, closing at Php56.77:US$1.

The PSEi benchmark index rose 40.58 points or 0.66% to close at 6,186.10. The top gainers were JFC (+4.72%), CNVRG
(+4.11%), MER (+3.21%), SM (+1.78%), and BDO (+1.39%). On the other hand, the top decliners were AC (-2.08%), CNPF (-
2.04%), URC (-1.83%), MONDE (-1.82%), and BLOOM (-1.69%).

Value turnover inched up to Php4.5Bil from Php4.3Bil previously. Meanwhile, foreign investors were net buyers for a third
consecutive day, purchasing Php206.8Mil worth of shares.
Top Story:

SSI: Earnings beat on strong 4Q24 sales and margins


(BUY; FV: Php4.30/sh)

Profits beat forecasts on higher-than-expected sales and margins. SSI reported fourth quarter profits of Php1.2Bil, an
increase of 18.4% y/y and 132.0% q/q. Full-year profits stood at Php2.5Bil (-2.7% y/y), beating our forecasts and accounting
for 153.2% of our full-year forecast. Results were ahead of our forecasts mainly from higher-than-expected sales and margins.
Revenue growth picked up to 11.4%, faster than the 6.5% rate in 3Q24. Meanwhile, EBIT margin slightly declined by only 30bps
y/y to 15.9%, at a softer rate compared to our forecasts.

Exhibit 1: Results Summary


% of
in PhpMil 4Q23 4Q24 %Change FY23 FY24 %Change
COL
Net Sales 8,752 9,748 11.4 27,661 29,923 8.2 102.4%
Gross Profit 4,073 4,813 18.2 12,503 13,678 9.4 106.9%
Gross Margin % 46.5 49.4 45.2 45.7 -
Operating Income 1,417 1,548 9.2 3,401 3,136 (7.8) 139.2%
Operating Margin % 16.2 15.9 12.3 10.5
Net Income 1,053 1,246 18.4 2,580 2,510 (2.7) 153.2%
Net Income Margin % 12.0 12.8 9.3 8.4
Source: SSI, COL Estimates

Robust 4Q sales fueled by Luxury & Bridge momentum, FAL rebound. Revenues grew by a solid 11.4% y/y to Php9.8Bil,
accelerating from the 6.5% growth rate recorded in 3Q24. This improvement was driven primarily by strong sales in the Luxury
& Bridge segment (+17.0% y/y) and the sharp rebound in the Fashion, Accessories, and Luggages (+69.4%). Meanwhile, sales
of Fast Fashion (+0.3%) remained relatively flat amid a high revenue base last year and ongoing renovations in key branches.
On the other hand, the Others category (-1.2%), which includes personal care, food, home, variety stores, and outlets, slightly
underperformed. For the full year, revenues reached Php29.9Bil (+8.2%), exceeding expectations and accounting for 103.4%
of our full-year forecast.

Exhibit 2: Segment Sales Breakdown


in PhpMil 4Q23 4Q24 % Change FY23 FY24 % Change
Luxury & Bridge 2,601 3,044 17.0 8,436 9,497 12.6
Casual 1,515 1,671 10.3 4,183 4,655 11.3
Fast Fashion 3,094 3,102 0.3 9,867 9,955 0.9
FAL* 579 981 69.4 2,066 2,227 7.8
Others 963 951 (1.2) 3,109 3,590 15.5
Total 8,752 9,748 11.4 27,661 29,923 8.2
Source: SSI

Exhibit 3: Quarterly GPM and EBIT Margin Trend


60.0%
49.4%
50.0% 45.4%
43.4% 43.1%

40.0%

30.0%

20.0% 15.9%

8.4% 8.8%
10.0% 6.3%

0.0%
1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24
Gross margin Operating margin

Source: SSI
Margins surprise to the upside. SSI’s EBIT margins delivered a positive surprise in 4Q24, jumping to 15.9% from 8.8% in 3Q24.
Although this was still lower by 30bps y/y, the contraction was notably milder compared to the -260bps drop recorded over
9M24. The improvement in margins was driven by a strong recovery in the retailer’s GPM, which climbed to a multi-year high
of 49.4%, likely reflecting strong consumer demand for its merchandise and a reduced reliance on promotional activity during
the period. However, operating expenses remained elevated, rising 23.0% y/y, which pushed the opex-to-sales ratio to 33.5%
from 30.3% in the prior quarter. SSI closed out the year with a 10.5% EBIT margin, lower than the 12.3% rate it achieved in
FY23 but still outperforming our 7.7% projection.

Reiterate BUY. We reiterate our BUY rating on SSI with a fair value estimate of Php4.30/sh. We believe SSI's faster-than-
expected earnings recovery and outperformance relative to its peers underscores the resilience of its core customer base.
The pickup in discretionary spending in 4Q also supports our more constructive view consumer spending this year.

News Highlights:

CEB: 1Q25 passengers increase by 26.4% y/y

In CEB’s disclosure, it reported a total of 7.0Mil passengers flown for the first quarter of 2025, up 26.4% y/y. The growth was
reflected across both domestic and international passenger volumes. Specifically, the airline reported 5.2Mil (+27.9% y/y) and
1.8Mil (+21.8%) passengers for domestic and international passengers, respectively. They note that this growth was reached
despite the holy week break falling in the second quarter of the year. Seat load factor improved by 1.0 ppt y/y along with a
24.8% growth in seat capacity.
Against forecasts, CEB’s passengers flown slightly exceeded estimates, representing 25.9% of our full-year estimate. Note
that seasonally, CEB reports ~25.0% of their passenger revenue during the first quarter.

MER: Franchise is renewed for another 25 years

President Ferdinand R. Marcos, Jr. signed into law the measure extending MER’s franchise for another 25 years on April 11. The
power distributor’s current franchise was set to expire in 2028. With the renewal, MER will have the authority to distribute
power to Metro Manila, Bulacan, Rizal and select areas in Batangas, Laguna, Quezon and Pampanga until 2053. (Source:
BusinessWorld)

Economy: Personal remittances grow by 2.6% y/y to USD$3.0Bil in February 2025; cumulative level reaches USD$6.3 Bil

Personal remittances from Overseas Filipinos (OFs) grew by 2.6% to USD$3.02Bil in February 2025, driven by contributions
from both land-based and sea-based workers. Cumulative remittances for January to February 2025 reached USD$6.27Bil, up
2.7% y/y. Meanwhile, cash remittances sent through banks rose by 2.7% y/y and 2.8% on a YTD basis. The top three country
sources of cash remittances in this period were the U.S. (40.9%), Singapore (7.6%), and Saudi Arabia (6.0%). (Source: BSP)

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