DM Wenceslao

DMWAI’s lower IPO price may spark interest

PROPERTY DEVELOPER and construction firm D.M. Wenceslao & Associates, Inc. (DMWAI) has priced its initial public offering (IPO) at a discount, which analysts said would make the offer more attractive to investors given the persistent volatility in the stock market.

In a listing notice posted to the stock exchange on Monday, DMWAI said it has priced its IPO at P12 per share, significantly lower than the maximum price of P22.90 per share it announced before.

The final offer price will allow the company to raise P8.15 billion from the issuance of 679.17 million shares, and up to P9.37 billion should it exercise its overallotment option of up to 101.88 million shares.

DMWAI had initially targeted to raise P15.55 billion from its primary offer, and up to P17.89 billion including the overallotment option.

“Investors will look at it as an opportunity to buy. Since it looks like the company (is giving) the investing public some room for price appreciation. From an investors’ standpoint, it’s a huge discount most especially (since) the maximum price is P22.90,” UPCC Securities Corp. Trader Aristotle D. Reyes, Jr. said in a text message.

Timson Securities, Inc. trader Jervin S. De Celis noted the company may have opted for a lower price due to the market’s volatility.

“I think they did it on purpose as the market’s volatility may dampen investors’ appetite for IPO’s so lowering the offer price will make it attractive to the investing public,” Mr. De Celis said in a separate message.

The volatility in the market has already discouraged Del Monte Philippines, Inc. from pushing through with its planned P17.55-billion share sale this month, announcing last week that it will wait for the market to stabilize before proceeding with the IPO.

Despite the discount, Mr. De Celis is keeping a conservative stance on the stock’s performance given the size of the offer.

“However, I don’t expect that this stock will perform as stellar as the IPO of DoubleDragon (Properties Corp.) and Xurpas, (Inc.) a few years ago, when those stocks rallied on the first day of trading since DMWAI’s offer is too big,” Mr. De Celis added.

DMWAI will use the net proceeds of the offer to finance its projects in the 204-hectare Aseana City in Parañaque City. The company has nine projects lined up in the area set to be completed in the next five years.
In a market note, brokerage F. Yap Securities, Inc. cited DMWAI’s land bank of 56.91 hectares in Aseana City as one of its competitive strengths.

“(DMWAI) currently has a land bank of 77.56 hectares in the Philippines, that will meet the development needs for the next 10 years. Bulk of this is in Aseana City (56.91 hectares) with a value at around P132.8 billion, including existing properties and current developments,” according to F. Yap Securities.

However, the brokerage also said that “stiff competition from other developers in close proximity” may also affect the company’s performance. Aseana City is located near the SM Mall of Asia complex, as well as Entertainment City.
DMWAI’s IPO is set to run from June 18 to 22, with target listing at the stock exchange on June 29. It will have the ticker DMW.

The company has engaged BPI Capital Corp. and Maybank King Eng Securities Pte. Ltd. as the joint global coordinators and bookrunners for the offer, with the latter also acting as international lead manager and underwriter.

D.M. Wenceslao to spend P12B on Aseana City over next 5 years

D.M. Wenceslao & Associates, Inc. (DMWAI) will be spending P12 billion over the next five years to develop its mixed-use estate in Pasay City, banking on the rising demand for residential, retail, and commercial spaces in the area.

The newly listed property and construction firm said this spending plan will allow for the development of projects covering 400,000 square meters in the 204-hectare mixed-use business district Aseana City. “(Development) depends on demand, whether the market can readily absorb it. At least for the next five years, that’s the demand we’re seeing,” DMWAI Chief Executive Officer Delfin Angelo C. Wenceslao said in a press briefing in Pasay City on Thursday.

The company has alloted P3.1 billion for its capital expenditures in 2018, more than three times higher than the P850 million it spent in 2017. DMWAI is set to spend P3.5 billion for 2019 and P4.3 billion for 2020, while the balance will be spent from 2021 to 2022.

DMWAI raised P8.1 billion through an initial public offering on June 29, which will be used to partially fund its capex for the coming years.

The property firm lined up nine projects that will be completed in the next five years, three of which are residential projects with a total saleable floor area of 88,000 sq.m., and six commercial developments covering 280,000 sq.m of leasable space.

These will be added to DMWAI’s existing projects in Aseana City, most of which are leasing spaces — Aseana One, Aseana Two, Aseana Powerstation Building, Aseana Town Center, and Aseana Square.

“We have logistics companies because they want to be near the port and airport areas, BPOs, traditional, and gaming…Majority are really the traditional companies, shipping, logistics, manning companies,” Mr. Wenceslao said.

Of the 80,000 sq.m of office leasing under their portfolio, Mr. Wenceslao said around 30% has been taken up by online gaming companies. The company is limiting their exposure to the gaming industry to around 30-40% of their portfolio.

“If you take away the areas that have been leased, developed, the areas for our future pipeline that is four hectares, you’re left with roughly 29 hectares. It’s still good for, at least for our development, 10 years,” Mr. Wenceslao said.

The DMWAI executive noted that Aseana City comprises around 65% of their current land bank, with rest located in Cavite, Quezon City, and Makati. The company, however, does not intend to develop their other properties any time soon.

“Majority of the real estate development activity we see it (in Aseana) ’cause this is where the action is,” he said.

nag test buy@9.5 ...bagsak!! lolz
Bullish or Bearish, I will Buy .... Autem Neque Me Invito Tactiost! \m/
...bili ka ulit! Big Grin

Forum Jump:

Users browsing this thread: 1 Guest(s)