AllHome soars on positive sentiment after initial public offering

AFTER DEBUTING at the Philippine Stock Exchange (PSE) on Thursday and recording only two days of trading so far, AllHome Corp. was already one of the most actively traded stocks in the local bourse last week.

The home retail company of richest Filipino Manuel B. Villar, Jr. managed to record the highest volume and value of shares traded at the PSE from Oct. 7 to 11, trading a total of 29.71 million shares worth P342.2 million.

It closed the week with a share price of P11.54 each on Friday, down 0.17% or 0.02 points from Thursday's maiden performance. But the value is still higher than its offer price of P11.50 apiece during its initial public offering (IPO).

AllHome's maiden share sale followed those of real estate management firm Kepwealth Property Phils, Inc. and coconut products manufacturer Axelum Resources Corp.

“It continues to be the most active stock as positive market sentiment prevailed in the session after the start of the IPO,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message Saturday.

He added AllHome has an aggressive expansion plan slated for the coming year — a target of having 70 stores by end of 2020, or more than double its current 27 stores — making it an attractive company for investors.

When AllHome held a listing ceremony at the PSE Tower in Bonifacio Global City on Thursday, Vice Chairman Camille A. Villar said the company is looking at doubling by 2020 its market share in the home improvement sector from 7.1% today.

The company is investing P3.5-3.6 billion for capital spending until next year, which will fund its aggressive expansion program that will initially hit mostly Metro Manila and its neighboring towns.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said if AllHome succeeds in its plans, it is expected to meet a net income of P2 billion by end of next year.

“The company mentioned they plan on doubling their market share by aggressively expanding store footprint. Should they be able to meet these said projections, then the company will be able to readily meet its P2 billion net income projection for 2020,” he said in a mobile message Saturday.

Aside from the company's independent plans, Mr. Limlingan said the lack of a strong catalyst to drive the stock market last week also came in favor of AllHome's entry.

“Given the circumstances of a rather light trading month (P3.5 billion to P5 billion turnover), some negative macro economic developments (SinoUS trade war), the ongoing Middle Eastern conflict (Iranian oil tanker attacked in the Red Sea), and the lack of any local catalyst, AllHome is slowly being warmly received by investors as the stock managed to close the session slightly above its IPO price,” he said.

Mr. Limlingan added since AllHome is an affiliate of Vista Land & Lifescapes, Inc. (VLL), some investors seem to be taking interest in moving their eggs to different Villar-owned baskets.

“Its sister company VLL has been trading sideways to slightly lower for the week. Perhaps some funds are lessening their exposure in the company, switching from VLL to AllHome as investment management companies must be diversified,” he said.

For Philstocks Financial, Inc. Research Associate Claire T. Alviar, AllHome's positive performance in the stock market was driven by its sustained interest from investors after pricing its shares at the lowerend of its indicative range when it held its IPO.

When AllHome announced in late September it is setting its offer price at P11.50 per share — the lower end of its range of P11.50 to P14, which was already down from its earlier target of selling at P16 apiece — the underwriters of the company said a lot of local and foreign investors expressed interest in AllHome during roadshows.

“AllHome was one of the actively traded stocks last week given its debut in the market and since AllHome looks attractive for the investors after it (was) priced at (the) lowerend of its given range,” Ms. Alviar said in a text message Sunday.

“Aside from that, investors are also looking at the bright prospects of the company as it disclosed plan of doubling the market share in home improvement retail industry in relation to its expansion plan,” she added.

Looking forward, Ms. Alviar said Philstocks is projecting AllHome to have a net income of P1.564 billion this year, supported by its strong sales from current stores on top of sales from new ones opening before 2019 ends. She projects resistance for the company's stock at P11.56 and support at P11.48 per share.

For Diversified Securities' Mr. Pangan, he said his projected net income for AllHome is P1.1 billion by the end of 2019. Resistance is seen at P11.62 with support at P11.42 per share.

Regina Capital's Mr. Limlingan said support of stock for AllHome should stay at IPO price for now, or P11.50 apiece.