Strong Q1 results lift AllHome Corp.’s shares
THE reported double- digit growth in its first quarter financial results, despite the coronavirus disease 2019 (Covid-19) pandemic, boosted AllHome Corp.’s shares to 31 percent week-on-week.
The Villar-led home improvement company saw its shares climb by P1.33, or 23.46 percent, to P7.00 amid the 0.8-percent slip in the benchmark Philippine Stock Exchange Index on Friday.
In a message to The Manila Times, Philstocks Financial Inc. research associate Claire Alviar attributed the surge AllHome’s experienced to its recently disclosed strong first quarter earnings.
Last Thursday, AllHome Corp. said its first quarter profit rose by 30 percent to P270.2 million in the first quarter from P207.1 million in the same period last year while its consolidated revenues jumped 41 percent to P3.4 billion from P2.4 billion year- on- year.
Alviar said the growth in the company’s first quarter net income came as a surprise since quarantine measures were enforced midMarch, temporarily suspending operations of some of its stores.
“The 30-percent increase of its first quarter net income was also unanticipated after Wilcon, the leading home retail firm, was not spared from the adverse effect of [the] Covid-19 pandemic as it reported 32-percent decline in first quarter net income,” she added.
She also noted that AllHome managed to bounce back from its slow start during the last trading week, which was caused by its “lower-than-expected” annual net income in 2019.
AllHome Corp. netted a P1.1billion income last year, a 105.3- percent surge from the P511.4- million figure it posted in 2018.
Alviar said the figure was “lower than its compounded annual growth rate of 231 percent.”
Diversified Securities Inc. trader Aniceto Pangan concurred that the company’s earnings result in the previous quarter “influenced its week-on-week performance as the sustained growth were strong enough to increase its price.”
As the economy begins to slowly reopen, both Alviar and Pangan see AllHome’s shares further improving.
“Since it avoided a slump in first quarter earnings, investors expect that it could be one of the companies to be resilient in this time of crisis. This is along with the easing of lockdown measures and resumption of public and private construction activities,” Alviar said.
“We think that with relaxed lockdown measures, together with its anticipated growth in home retail industry, Allhome is highly tradable. Trading range could be from support of P6.00 to P9.25 resistance level,” she added.
Pangan, on the other hand, said the continuous reopening of the market would “definitely boost” AllHome’s revenues.
“As reopening continues, this will definitely boost revenues for the company as shelter is among the basic needs of the family,” he added.
Furthermore, Alviar noted that investors’ sentiment toward AllHome’s shares could improve further if there would be a positive sentiment in the general market if community quarantine measures would be further eased and if household final consumption spending for furnishings, household equipment and maintenance recovers.