Business Overview
The company started out engaging in exploration and development of mines under the corporate name, Leyte Base Mining Corporation, Inc in 1969. In 1993, the firm have shifted focus onto oil exploration and changed the name to Pacific Rim Oil and Resources Corporation. 2 years later, the board decided to divest from the oil business and shift towards being an investment holdings company.
The corporation's main business is the acquisition, development and sale of real estate properties, either through its own subsidiaries or through tie-ups with major real estate and property development companies in the field. The corporation also delivers medical and health services to outpatients through its ambulatory care centers.
The corporation's main business is the acquisition, development and sale of real estate properties, either through its own subsidiaries or through tie-ups with major real estate and property development companies in the field. The corporation also delivers medical and health services to outpatients through its ambulatory care centers.
Subsidiaries and Projects
1.) Real Estate and Property Development
a.) Ceres Property Venture, Inc (CPVI) - organized primarily to acquire, develop and sell real estate properties. Started commercial operations in 2010. Owns over 4 hectares of real estate properties along Levi B. Mariano Ave in Taguig City. CPVI has ownership interest in Cypress Towers which gave around 20% to the Corporation's total revenue for 2012 (45% in 2011). The land where Cypress Towers now stand was owned by CEI's subsidiary.
 |
| Cypress Towers - Developed in partnership with DMCI |
b.) Crown Central Properties Corporation (CCPC) - Joint venture with Solid Share Holdings, Inc. In 2003, CCPC entered into a Memorandum of Agreement with Sta. Lucia Realty whereby land is formed by the latter and CCPC shall be responsible for completing the development of the subdivision project. Sharing agreement was 60-40% in favor of CCPC.
 |
| Palma Real - In partnership with Sta Lucia Realty. Project completed and marketing in progress. Contributed 25% to Total Revenue in 2012 |
d.) Parkfield Land Holdings, Inc (PLHI) - 75% owned subsidiary of the Corporation. PLHI owns 92 hectares of land located in San Jose del Monte, Bulacan. No significant business development so far.
2.) Healthcare
a.) Healthcare System of Asia Phils, Inc - contributed 41% of Total Revenue for the year 2012
FortMed Medical Clinics http://www.fortmed.org/
- Makati clinic (Jupiter St) started out in 1997 while the 2nd clinic located at Sta Rosa, Laguna started in 1998.
Makati clinic is located within the vicinity of Bel-Air Village while the Laguna clinic is located in Greenfield Business Park, Sta. Rosa.
|
Key People
1.) George L. Go - Chairman of the Board. Also the chairman of the ff: Healthcare Systems of Asia Philippines, Asian Alliance Holdings and GLG Crown Holdings. Also a director of Shang Properties, Inc. and Asian Alliance Investment Corporation. BS Econ grad from Youngstown University in the US and completed an advanced management program in Harvard Business school.
2.) Wilfrido V. Vergara - Vice Chairman of the Board. He is Chairman/Vice Chairman/Director of most subsidiaries under CEI. Obtained Bachelor's degree from Ateneo.
3.) Ramon Recto - Independent Director, member of Audit and Nomination committee. President of Marcventures, former president of Lepanto Mining Corporation. BS EE/ME from UP and MS Industrial Management from the same university.
4.) Isidro Consunji - Independent Director. President of DMCI and Director of other companies such as Semirara Mining, Atlas Mining, Carmen Copper, DMCI , among others.
5.) Patrick Warren Go - Director. Managing Director of Healthcare Systems of Asia Phils. Former VP at Banco De Oro. Bachelors graduate of Finance and Real Estate from San Francisco University. Son of George L. Go.
2.) Wilfrido V. Vergara - Vice Chairman of the Board. He is Chairman/Vice Chairman/Director of most subsidiaries under CEI. Obtained Bachelor's degree from Ateneo.
3.) Ramon Recto - Independent Director, member of Audit and Nomination committee. President of Marcventures, former president of Lepanto Mining Corporation. BS EE/ME from UP and MS Industrial Management from the same university.
4.) Isidro Consunji - Independent Director. President of DMCI and Director of other companies such as Semirara Mining, Atlas Mining, Carmen Copper, DMCI , among others.
5.) Patrick Warren Go - Director. Managing Director of Healthcare Systems of Asia Phils. Former VP at Banco De Oro. Bachelors graduate of Finance and Real Estate from San Francisco University. Son of George L. Go.
Dividend Policy
No dividends have been declared over the past 3 years.Quick Numbers
Fundamentals
Book Value of Equity (AR 2012): ~Php1.68B
Outstanding Shares: ~13.6B
BV/share: Php 0.123
Debt Ratio (Long term): 0%
Beta: 0.823
Cost of Capital: 10.4%
Net Income:
2012 : Php 13.5M
2011: Php 22.19M
2010: Php 12.4M
time-weighted average NI: Php 15.88M
A conservative assumption of long-term growth (3% yearly), would put the fair value of the company (based on earnings - DCF analysis) at around:
Fair Value/share: Php 0.033
Debt Ratio (Long term): 0%
Beta: 0.823
Cost of Capital: 10.4%
Net Income:
2012 : Php 13.5M
2011: Php 22.19M
2010: Php 12.4M
time-weighted average NI: Php 15.88M
A conservative assumption of long-term growth (3% yearly), would put the fair value of the company (based on earnings - DCF analysis) at around:
Fair Value/share: Php 0.033
As of May 31, 2013, current market price is at 0.081 which is already way beyond our fair value price in terms of growth.
=================
Technicals
CEI has been trading on range between .062 and 0.089. Last time it reached its peak was on March 2012. I only got interested with this stock lately when I saw the huge volume transaction for May 31, 2013. It turns out that it was just a cross-trade within Public Securities for some reasons unknown. For other days, CEI remains to be illiquid despite a public float of 71%.
Analysis
CEI's source of growth for the short term would come from sales of units from the Palma Real project. Although the Cypress Towers project would still continue to generate revenue, most of the profit already came in as early as 2011. CEI's landbank through its subsidiaries remain idle and has no business prospect yet within the year.
Majority of the corporation's revenues is still expected to come from its health care business. However, I noticed through their financial statements that operating expenses outrun their revenues. This is definitely not sustainable especially when I see that it has been already the case for the last 3 years.
Current market price at .081 is lower than the book value of 0.12 which may be of interest for value players out there. Personally, I am looking for an undervalued stock with growth potential and the latter is what CEI lacks for now. If ever I am going to buy using technicals, I think I'd rather wait at 0.06 levels which is near the trading range support.
Majority of the corporation's revenues is still expected to come from its health care business. However, I noticed through their financial statements that operating expenses outrun their revenues. This is definitely not sustainable especially when I see that it has been already the case for the last 3 years.
Current market price at .081 is lower than the book value of 0.12 which may be of interest for value players out there. Personally, I am looking for an undervalued stock with growth potential and the latter is what CEI lacks for now. If ever I am going to buy using technicals, I think I'd rather wait at 0.06 levels which is near the trading range support.
Images via Google search
-------
This post does not give a comprehensive analysis on the company/industry. This is only a summary or a company snapshot as of the date it was posted. Spotlight stocks featured in this blog are being chosen arbitrarily, and are only intended for the blog owner's personal consumption; not as a form of solicitation to buy or to sell. Comments from readers who would like to point out errors, to share ideas, etc are most welcome.
Posts
