SM Prime rises after 2024 earnings report

INVESTORS SNAPPED UP shares of property developer SM Prime Holdings, Inc. last week after the company announced record-high earnings for 2024.

Data from the Philippine Stock Exchange showed that SM Prime was the eighth most actively traded stock by value last week, with 61.71 million shares worth P1.40 billion changing hands from Feb. 17 to 21.

The property giant’s shares closed at P23.70 apiece on Friday, up 3% from P23 a week earlier. However, this marked a 5.8% decline from its last closing price of P25.15 per share on the final trading day of 2024.

Juan Alfonso G. Teodoro, an equity research analyst at Timson Securities, Inc., said the upward trajectory indicated that investors welcomed the company’s financial results.

“Although there was a positive reaction to the earnings news, the overall performance of the stock still shows that investor sentiment may be influenced by other important market conditions,” Mr. Teodoro said in a Viber message.

“We also have profit-taking as another factor. After a positive earnings report, some investors might sell their shares to lock in gains, which could limit upward momentum,” he added.

Jeff Radley C. See, head trader at Mercantile Securities Corp., said that while investors were bullish on the stock, overall sentiment regarding the earnings report was overshadowed by the recent decision of the Bangko Sentral ng Pilipinas (BSP) to pause policy easing.

“Higher interest rates will make it more expensive for them to borrow,” Mr. See said in a separate Viber message.

The BSP initiated its easing cycle in August, cutting borrowing costs by a total of 75 basis points by the end of 2024.

However, in a surprise move at its first policy meeting this month, the central bank kept its policy settings steady as it braces for uncertainties stemming from the looming global trade war under US President Donald J. Trump.

The BSP signaled that the easing cycle remains underway.

In a disclosure to the local bourse last week, SM Prime reported a consolidated net income of P45.6 billion in 2024, up 14%, driven by growth across all business segments.

Revenues likewise rose 10% to a record P140.4 billion last year.

Earlier this month, SM Prime announced plans to invest P33 billion in its malls and commercial property portfolio. Of this, P21 billion is allocated for expanding the gross floor area of its malls, P6 billion for expanding its hospitality and meetings, incentives, conferences, and exhibitions (MICE) operations, and P6 billion for developing new office towers and workspaces.

Mr. Teodoro said investors see these expansion plans as a sign of the company’s “confidence” in market demand and growth opportunities.

“SMPH [referring to its ticker] is preparing itself to benefit from future economic expansion and growing consumer spending by making major investments in malls, hospitality, and office spaces,” he said.

Mr. See, however, noted that concerns over a potential condominium unit bubble contributed to the negative sentiment.

For Mr. Teodoro, SM Prime is expected to sustain its growth trajectory, supported by economic recovery, rising consumer confidence, and continued expansion.  

“Our estimated forecast for SMPH’s Q1 2025 earnings is approximately P9.95 billion. For the full year, our net income forecast is approximately P53.12 billion,” he said.

Mr. See set resistance levels at P24 and P26, while support levels were at P21.80 and P22.85.

Meanwhile, Mr. Teodoro saw P23 to P23.30 as resistance levels and P22 as support. — Kenneth H. Hernandez