EconomyEditor's PickAllDay’s expansion plans lure investors in first week

November 7, 2021

By Keren Concepcion G. Valmonte, Reporter

NEWLY-LISTED AllDay Marts, Inc. was one of the most actively traded stocks last week, as investors sought a piece of one of the fastest-growing grocery retailers.

Data from the Philippine Stock Exchange (PSE) showed a total of 4.6 billion AllDay shares worth P3.97 billion were traded from Nov. 3 to 5, making AllDay the fifth most active stock on the market.

Friday saw AllDay’s stock close at 77 centavos apiece compared to its initial public offering (IPO) price of 60 centavos per share.

AllDay made its market debut last Wednesday, hitting the 50% daily trading limit at the beginning of the trading session.

“Investors who haven’t been allocated enough shares during the offer period attempted to buy AllDay shares in the open market instead, which may have played a part in the stock’s strong close during the first day of trading,” Darren Blaine T. Pangan, trader at Timson Securities, Inc., said in a Viber message on Friday.

“Profit taking activity was more pronounced and eventually pulled the stock lower during its second day of trading,” Mr. Pangan said. “[AllDay], however, still closed higher than its IPO price.”

On Nov. 4, AllDay shares hit a high of P1.10. It reached an intraday low of 71 centavos before closing higher than its IPO price by 23.33%, or 14 centavos, to 74 centavos apiece. However, this is lower than its 90 centavos finish on Nov. 3.

Investors were drawn to the stock because of the company’s expansion plans, said Claire T. Alviar, senior research and engagement officer at Philstocks Financial, Inc.

“It is… one of the fast-growing grocery stores in the Philippines with earnings growing by a two-year CAGR (compound annual growth rate) of 94.92%,” Ms. Alviar said in a Viber message on Saturday.

“Positive sentiment in the market given the easing of restrictions and reopening of the economy also helped in the first-week performance of [AllDay],” she added.

Metro Manila’s quarantine restrictions have been lowered to Alert Level 2, which will be in effect until Nov. 21.

The Villar-led grocery operator plans to use its IPO proceeds to pay off debt, fund capital expenditures, and expand its store network.

AllDay intends to expand its current 33-store network to 45 by next year and 100 by the end of 2026.

AllDay’s sales surged to P7.93 billion in 2020 from P3.05 billion in 2018, representing a CAGR of 61.4%, according to its final prospectus dated Oct. 12. Its net profit increased at a CAGR of 94.2% during the period, reaching P219.6 million in 2020.

“The management’s confidence that their strong performance over the years can be sustained may have given a boost to the stock’s performance over the past few days,” Timson Securities’ Mr. Pangan said.

First-half profits rose 58.8% to P179.6 million, while sales grew 19.7% to P4.49 billion in the first half of 2021. Philstocks Financial’s Ms. Alviar believes that AllDay’s momentum will continue into the second half of the year.

“This year, we expect [AllDay’s] net income to grow by 79.28% year on year to P393.69 million since we project [AllDay’s] top line in the second half to be 1.5 times higher than the first six months, given the seasonality factors in the last quarter of the year, particularly with the easing of restrictions,” she said.

“We remain bullish but we will monitor its expansion plans, particularly if it will be able to meet its target [store openings] next year.”

Ms. Alviar pegged the stock’s support at 75 centavos and its resistance at 80 to 83 centavos.

Meanwhile, Mr. Pangan placed the support and resistance levels at 74 centavos and P1.10, respectively.

“As the volatility quiets down in the coming days, we’ll have to see if its support at P0.74 holds, otherwise its IPO price at P0.60 may be considered the next support area to watch,” he said.

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