Maybank upbeat about Ayala Corp prospects

AYALA Corp. is expected to record a 13-percent year-on-year net income growth this year on the back of subsidiary Ayala Land Inc.’s (ALI) performance, Maybank Investment Banking Group said Monday.

In a report, Maybank said the country’s oldest conglomerate would likely deliver an 18-percent year-on-year increase in core net income in 2024 that “should be largely driven by its property arm.”

The investment bank also raised its earnings forecast for Ayala Corp. in the fiscal year 2023 to 47 percent yearon-year due to ALI contributions and the one-off gain from the sale of the fourkilometer Muntinlupa-Cavite Expressway (MCX) to the Villar group.

Villar-led Prime Asset Ventures Inc. completed the P3.8billion acquisition of the MCX toll road from Ayala in August of last year, following approval from the Department of Public Works and Highways.

Meanwhile, ALI’s core earnings were expected to revert to pre-pandemic levels at the end of 2024, driven by improvements in the property developer’s commercial leasing segment, Maybank said in a December report.

Aside from ALI, Ayala-led firms ACEN Corp., Globe Telecom Inc., and Bank of the Philippine Islands were also seen contributing to the conglomerate’s expected growth this year, the bank noted, as the subsidiaries provide “more near-term catalysts.”

Maybank said another potential tailwind for Ayala would be its wholly owned unit, AC Infrastructure Holdings Corp., which is part of the Manila International Airport Consortium that submitted a bid for the P171-billion rehabilitation of the country’s main gateway.

Upside factors for the group’s growth also include expansions in health care and logistics segments, as well as the accelerated value realization of portfolio investments.

Income improvements would likely be tapered by headwinds in ALI, which remains the largest contributor to Ayala’s net asset value (NAV), Maybank said.

“As the group’s property, power, and telco divisions remain in investment mode, dividend distributions are likely to be flat. Nevertheless, upside to the stock is largely driven by NAV growth, which remains on track,” it added.

ALI’s Monday share price rose by P1.00 to close at P33.35 each.