MER Stock Study, Post 2: MER Fundamental Analysis Before the Gap Down

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A pre-gap-down fundamental review of MER using only information available as of the July 24, 2026 market close.

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👉 Start Here | CSSC Learning Series | MH Application Series | MH Operator Journal

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Bago natin tingnan kung ano ang nangyari sa presyo ng MER, gusto muna nating balikan kung ano ang makikita sa negosyo bago dumating ang negative sentiment. Sa reconstruction na ito, hanggang July 24, 2026 market close lamang ang alam natin—walang hindsight, walang post-event explanation.

Originally published: July 31, 2026 · Last updated: July 31, 2026

Links to related posts

• MER Stock Study, Post 1: MER Series Introduction
• MER Stock Study, Post 2: MER Fundamental Analysis
• MER Stock Study, Post 3: MER Technical Analysis
• MER Stock Study, Post 4: MER Valuation
• MER Stock Study, Post 5: MER Risk Management
• MER Stock Study, Post 6: MER Capital Allocation

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Nilalaman

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Ang Punto ng Usapan

Ang tanong natin ay hindi muna kung mura o mahal ang MER.

Hindi rin muna kung dapat ba itong bilhin matapos bumagsak.

Ang tanong natin ay mas basic pero mas mahalaga:

Bago nangyari ang gap down, ano ba talaga ang klase ng negosyong hawak natin sa MER?

Sa Micro Harvesting 2.0, pinag-aaralan natin ang MER bilang kandidato sa Low Volatility Dividend Harvester bucket. Natural ang initial impression na iyon. Malaki ang franchise area nito, mahalagang serbisyo ang kuryente, matagal nang dividend-paying company, at historically hindi ito karaniwang tinitingnan bilang high-volatility speculative stock.

Pero habang binabasa natin ang financial statements, lumalabas na ang modernong MER ay hindi na simpleng distribution utility lamang.

May stable regulated core pa rin ito. Pero kasabay nito, lumalaki ang power generation, renewable energy, LNG, retail electricity supply, at iba pang capital-intensive investments.

Ibig sabihin, maaaring low volatility ang tingin ng market sa stock—pero mas komplikado na ang fundamental risk sa ilalim.

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Ang Dating Paniniwala

Madaling isipin ang MER sa ganitong paraan:

Malawak ang customer base. Tuloy-tuloy ang pangangailangan sa kuryente. Regulated ang distribution business. May dividends. Kaya defensive stock.

May katotohanan naman iyon.

Ayon sa Q1 2026 report, ang regulated segment ng grupo ay binubuo ng electricity distribution operations ng MERALCO, Clark Electric at Shin Clark Power. Kasama naman sa unregulated businesses ang power generation, retail electricity supply, engineering and construction, fintech-related services, telecommunications, electric mobility at iba pang energy-related businesses.

Malakas din ang franchise position. Sakop ng distribution business nito ang malaking bahagi ng Metro Manila at mga kalapit na lalawigan, at ang congressional franchise ay na-renew hanggang 2053. Tinatayang humahawak ang MER distribution area ng humigit-kumulang kalahati ng power requirements ng bansa.

Kung dito lamang tayo titingin, madaling buuin ang dating paniniwala:

Utility ang MER, kaya predictable ang earnings at mababa ang risk.

Pero hindi ganoon kasimple.

Ang distribution revenue ay heavily regulated. Ang mga singil, refunds, over-recoveries, under-recoveries, allowable returns at capital expenditures ay nakatali sa ERC-approved mechanisms. Hindi malayang nagtatakda ng presyo ang kumpanya tulad ng ordinaryong consumer business.

At habang lumalaki ang generation business, mas nagiging exposed din ang grupo sa construction risk, financing risk, interest rates, foreign exchange, fuel markets at project execution.

Kaya ang tamang description ay hindi na simpleng “stable utility.”

Mas tama sigurong sabihin:

MER is a regulated distribution platform with a growing capital-intensive energy portfolio.

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Ang Binagong Pananaw

Malakas ang earnings record

Mula 2021 hanggang 2025, malinaw ang pag-angat ng reported earnings attributable to parent shareholders:

• 2021: ₱23.50 billion
• 2022: ₱28.43 billion
• 2023: ₱38.02 billion
• 2024: ₱45.86 billion
• 2025: ₱51.13 billion

Kasabay nito, tumaas ang earnings per share mula ₱20.85 noong 2021 tungo sa ₱45.36 noong 2025.

Hindi ito stagnant utility story.

Sa loob ng apat na taon, higit sa doble ang EPS. Ang growth na iyon ay hindi lamang galing sa pagtaas ng electricity bills. Malaking bahagi ng bill ang pass-through charges—generation, transmission at iba pang costs na hindi awtomatikong kumakatawan sa mas mataas na profit margin para sa distributor.

Ang mas mahalagang development ay ang paglawak ng earnings contribution mula sa power generation at related businesses.

Diversified na ang earnings engine

Ang Power segment ng MER ay binubuo ng distribution, power generation at retail electricity supply. Sa pagtatapos ng 2025, may humigit-kumulang 5,069.7 MW net generating capacity na ang grupo mula sa coal, LNG, renewable energy at diesel facilities sa Pilipinas at Singapore, bukod pa sa malalaking solar projects na nasa development.

May dalawang epekto ito.

Una, nababawasan ang dependence sa regulated distribution earnings. Kapag mahina ang electricity sales growth sa franchise area, puwedeng manggaling ang incremental earnings sa generation at retail supply.

Ikalawa, lumalaki ang complexity.

Ang generation business ay nangangailangan ng malaking capital, long construction periods, financing arrangements, fuel sourcing at project execution. Hindi ito kapareho ng mature distribution network na may relatively predictable regulated return.

Kaya habang nagiging mas diversified ang MER, hindi automatic na nagiging mas mababa ang risk. Ang diversification ay maaaring magpalakas ng earnings—but it can also introduce new forms of risk.

Matibay ang dividend framework

Isa sa pinakamalakas na argumento para sa MER bilang Dividend Harvester ay ang malinaw nitong dividend policy.

Ang regular cash dividend policy ay katumbas ng 50% ng consolidated core net income, habang ang special dividends ay nakadepende sa available unrestricted retained earnings at free cash.

Ang declared regular dividends kada share ay:

• 2023: ₱19.55
• 2024: ₱21.54
• 2025: ₱25.07

Noong February 2026, nagdeklara rin ang kumpanya ng ₱16.67 per share cash dividend, mas mataas sa ₱13.74 na comparable declaration noong nakaraang taon.

Para sa 10 shares ng MH portfolio, ang ₱16.67 declaration ay katumbas ng ₱166.70 gross cash dividend bago ang applicable taxes.

Mahalaga ito, pero hindi rin natin dapat tratuhin ang dividend bilang guaranteed coupon.

Ang dividend payout ay nakatali sa core earnings, retained earnings at free cash. Kapag lumaki ang capital requirements, financing needs o regulatory obligations, maaaring magkaroon ng tension sa pagitan ng expansion at shareholder distributions.

Lumalaki rin ang balance sheet

Noong katapusan ng 2024, ang total assets ng grupo ay ₱617.96 billion. Pagsapit ng katapusan ng 2025, umakyat ito sa ₱823.88 billion.

Kasabay nito, tumaas ang interest-bearing long-term financial liabilities mula humigit-kumulang ₱60.49 billion noong 2024, kasama ang current portion, tungo sa humigit-kumulang ₱193.68 billion noong 2025.

Hindi agad ibig sabihin nito na mahina ang kumpanya. Malaki rin ang cash position nito—₱109.32 billion sa pagtatapos ng 2025.

Pero malinaw ang direksiyon:

Mas malaki ang MER, mas malaki ang asset base, at mas malaki rin ang financing requirement.

Pagsapit ng March 31, 2026, umabot sa ₱238.14 billion ang consolidated interest-bearing debt, mula ₱230.05 billion sa pagtatapos ng 2025. Umakyat din ang debt-to-equity ratio mula 1.33 patungong 1.43.

Ang dagdag na borrowing ay pangunahing ginamit para sa investments at strategic projects, kabilang ang MTerra Solar at iba pang generation initiatives.

Para sa dividend investor, hindi ito automatic red flag. Pero hindi rin ito dapat balewalain.

Ang isang high-capex company ay kailangang patuloy na mag-balance ng:

• dividends;
• network modernization;
• generation expansion;
• debt servicing;
• at liquidity.

Mas mahina ang Q1 2026 cash conversion

Sa Q1 2026, tumaas ang consolidated revenues ng 5% at ang net income attributable to parent ng 4%, mula ₱10.45 billion tungo sa ₱10.83 billion. Ang EPS ay umakyat mula ₱9.27 patungong ₱9.61.

Sa headline earnings level, maayos ito.

Pero may mga senyales na dapat bantayan.

Bumaba ng 2% ang electricity sales volume. Bumaba rin ang net cash provided by operating activities mula ₱9.72 billion sa Q1 2025 tungo sa ₱3.47 billion sa Q1 2026, habang umabot sa ₱25.40 billion ang capital expenditures sa quarter.

Hindi natin dapat direktang i-annualize ang isang quarter. Maaaring maapektuhan ng timing ng collections, working capital at project payments ang cash flow.

Pero bilang pre-gap observation, mahalaga ito:

Lumalaki ang earnings, ngunit mas mabilis din ang capital requirement kaysa sa operating cash generation sa quarter.

Iyan ang uri ng development na hindi agad makikita sa dividend history lamang.

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Paano Ito Umaandar

Ang distribution business ang stability layer

Ang regulated distribution business ang nagbibigay sa MER ng malaking customer base, recurring electricity demand at infrastructure moat.

Hindi madaling palitan ang distribution network. Hindi rin madaling pumasok ang bagong competitor at magtayo ng parallel grid sa parehong franchise area.

Pero ang economic return nito ay nakadepende sa regulatory framework.

Sa performance-based regulation, kinokonsidera ng ERC ang approved operating expenditures, capital expenditures at regulated return on the regulatory asset base. May reward o penalty rin depende sa network at service performance.

Kaya ang stability ng distribution business ay hindi nangangahulugan na walang policy risk.

Ang rate setting, refunds, delayed approvals, allowable recoveries at treatment ng bill components ay puwedeng makaapekto sa timing at amount ng earnings at cash flow.

Hindi lahat ng electricity charge ay MER profit

Ito ang isang importanteng point para sa ordinaryong investor.

Kapag tumaas ang electricity bill, hindi ibig sabihin na pareho ring tumataas ang MER profit.

Maraming components ng bill ang pass-through charges. Kinokolekta ng distributor ang generation at transmission costs at ipinapasa sa relevant suppliers o transmission operator, subject sa true-up and recovery mechanisms.

Ang actual distribution charge ang mas direktang konektado sa regulated distribution return.

Kaya mataas man ang reported revenue, kailangan pa ring tingnan ang purchased power costs, distribution margin at segment contribution.

Noong 2025, umabot sa ₱497.33 billion ang consolidated revenue, pero ₱377.28 billion din ang purchased power cost. Ang reported net income attributable to parent ay ₱51.13 billion.

Mataas ang revenue base, pero manipis ang economic spread kumpara sa total billings dahil malaking bahagi ay pass-through.

Ang generation business ang growth layer

Ang MGen at renewable-energy projects ang nagbibigay ng malaking growth optionality.

May exposure ang grupo sa coal, LNG, solar at regional generation assets. May long-term projects itong maaaring magdagdag ng earnings kapag naging fully operational.

Pero dito rin pumapasok ang:

• project delay;
• cost overrun;
• construction risk;
• fuel-price exposure;
• foreign-exchange exposure;
• interest-rate risk;
• at dependence sa power supply agreements.

Sa 2025 report, tinatayang ₱111.23 billion ng financial instruments na exposed sa floating interest-rate risk ang nakalista, kumpara sa ₱19.73 billion noong 2024. Tinataya rin ng kumpanya na ang 75-basis-point increase sa interest rates ay maaaring magbawas ng humigit-kumulang ₱834 million sa income before tax, all else equal.

Hindi nito sinasabing delikado agad ang balance sheet. Pero malinaw nitong ipinapakita na mas rate-sensitive na ang negosyo kaysa sa dating simpleng utility image.

Ang dividend ang shareholder-return layer

Malinaw at earnings-linked ang regular dividend policy. Iyan ang isang dahilan kung bakit may lugar ang MER sa Low Volatility Dividend Harvester watchlist.

Pero sa MH 2.0, hindi sapat ang dividend yield lamang.

Kailangan nating tanungin:

• Sustainable ba ang core earnings?
• Sapat ba ang operating cash flow?
• Gaano kalaki ang capex pipeline?
• Tumataas ba ang debt nang mas mabilis kaysa earnings?
• Gaano kalaki ang regulatory and policy sensitivity?
• At ano ang tamang allocation para sa ganitong klaseng risk?

Ang dividend ay bahagi ng thesis. Hindi iyon kapalit ng thesis.

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Fundamental Risks Visible Before the Gap Down

Hindi natin alam noong July 24 kung anong eksaktong balita ang susunod.

Pero may ilang risk categories nang malinaw sa public documents.

Regulatory risk

Ang distribution earnings, rates, refunds at recoveries ay nakadepende sa ERC decisions.

Sa 2025 financial statements, may nakasaad nang ₱987.2 million regulatory reset cost refund directive, bukod pa sa removal ng related charge mula sa distribution wheeling rate. Sumunod ang MER sa refund habang humihingi rin ng basis para sa computation.

Hindi nito hinuhulaan ang susunod na policy issue. Pero malinaw nitong ipinapakita na ang distribution economics ay maaaring maapektuhan ng regulatory reinterpretation at mandated refunds.

Political and public-sentiment risk

Kuryente ang isa sa pinaka-sensitive na household expenses.

Kahit pass-through cost ang malaking bahagi ng bill, ang MER brand ang nakikita ng customer sa billing statement. Kapag mataas ang presyo ng kuryente, madaling mapunta sa distributor ang public pressure.

Ibig sabihin, may pagitan ang legal economics ng bill at public perception nito.

Ang ganitong gap ay maaaring maging source ng sudden sentiment risk.

Capital-allocation risk

Malaki ang expansion program ng grupo. Nagdadala ito ng long-term growth, pero nangangailangan din ng malaking capital at debt.

Kung ma-delay ang projects, tumaas ang construction costs o bumaba ang expected returns, maaaring ma-pressure ang cash flow at future dividends.

Interest-rate and foreign-exchange risk

Maraming energy projects ang gumagamit ng imported equipment at foreign-currency contracts. Ang mas mahinang peso ay maaaring magpataas ng project costs at foreign-currency liabilities.

Samantala, ang mas mataas na interest rates ay direktang nakaaapekto sa floating-rate debt.

Volume and structural-demand risk

Bumaba ng 2% ang Q1 2026 electricity sales volume kahit lumaki ang customer base.

Hindi pa ito sapat para sabihing may structural decline. Pero maaaring maapektuhan ang traditional distribution volume ng energy efficiency, rooftop solar, economic activity at customer migration toward competitive retail arrangements.

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Preliminary Fundamental Reading

Batay lamang sa information available hanggang July 24, 2026, hindi mukhang fundamentally distressed company ang MER.

Malakas ang franchise. Lumalaki ang earnings. May malinaw na dividend policy. Diversified ang earnings base. Malaki ang cash balance. Na-renew ang franchise hanggang 2053.

Pero hindi rin ito dapat ituring na simpleng sleep-well utility stock.

Ang mas tamang reading ay:

Fundamentally strong, dividend-capable and strategically expanding—but increasingly capital-intensive, leveraged and exposed to regulatory-event risk.

Para sa MH 2.0, pasado ang MER bilang Low Volatility Dividend Harvester candidate, pero provisional pa lamang ang classification.

Hindi natin dapat i-equate ang low historical price volatility sa low fundamental event risk.

At hindi rin natin dapat i-full deploy ang ₱100,000 allocation dahil lamang matatag ang earnings history.

As of July 27, 2026, 10 shares lamang ang hawak natin at ₱5,963.86 ang deployed mula sa ₱100,000 allocation. Tama ang treatment nito bilang small visibility position habang hindi pa kumpleto ang technical, valuation at risk-management study.

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Pangwakas na Kaisipan

Kung July 24, 2026 lamang ang alam natin, ang MER ay mukhang de-kalidad na negosyo na may lumalaking earnings at improving dividends.

Pero may nakikitang pagbabago sa character ng kumpanya.

Mula sa classic regulated utility, nagiging mas malawak itong energy platform—may generation, LNG, renewables, retail supply at major capital projects.

Magandang development iyon para sa growth.

Pero aba’y habang lumalaki ang makina, mas marami ring piyesang kailangang bantayan.

Ang pinakaimportanteng pre-gap lesson ay hindi na dapat nating tawaging “low risk” ang isang stock dahil lamang historically mabagal gumalaw ang presyo nito.

Mas maingat ang language:

Low observed volatility, but with meaningful regulatory and capital-allocation risk.

Sa susunod na post, aalis muna tayo sa financial statements at titingnan natin ang chart as of July 24. Doon natin aalamin kung may technical weakness bang lumilitaw bago nagbago ang sentiment—o kung tahimik talaga ang chart bago dumating ang balita.

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Shariah Compliance Advisory (Updated Nov 26, 2025)

The PSE has confirmed that its Shariah screening program is currently paused, with no new lists to be released until their internal review is completed. Although news outlets reported quarterly updates up to mid-2025, these later lists are no longer accessible on the PSE website.

For now, the PSE’s Shariah-Compliant Securities page and all past lists have been removed from the public website. The December 24, 2024 list is the last official version in Micro Stock Trader’s possession, downloaded before the page was taken down, although other investors may still hold later copies such as the reported July 4, 2025 release.

All halal-focused strategies under Micro Stock Trader will use a conservative, self-screened approach until official guidance resumes, in shā’ Allāh.

• Micro Stock Trader: 2024 List of Shariah-Compliant Stocks at PSE – As of December 25, 2024

Ang post na ito ay bahagi ng aming personal learning journey sa securities analysis at portfolio governance. Ang mga konseptong may kaugnayan sa interest-based instruments, conventional bonds, preferred shares, o iba pang financial arrangements ay binabanggit lamang bilang bahagi ng academic coverage ng module at hindi bilang rekomendasyon o endorsement.

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Disclaimer

This post is for educational and documentation purposes only. It is not investment advice. Perform your own due diligence and consult qualified financial professionals before making investment decisions. All strategies, frameworks, and examples described here reflect the personal methodologies of Micro Stock Trader and are not guarantees of future performance.

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WLCON Stock Study, Post 2: WLCON Fundamental Analysis

Home › Board Lot Warrior › Micro Harvesting › Micro Harvesting 2.0 › MH Application Series › WLCON Stock Study › WLCON Fundamental Analysis

WLCON Fundamental Analysis: Sinusuri ang negosyo sa likod ng 30,000-share MH 1.0 carryover position.

👉 Explore the full Micro Harvesting 2.0 framework

👉 Start Here | CSSC Learning Series | MH Application Series | MH Operator Journal

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Hindi sapat na sabihing malaki ang ibinaba ng presyo ng WLCON. Bago natin pag-usapan ang chart, valuation, at capital allocation, kailangan muna nating tingnan kung bumabalik ba talaga ang lakas ng negosyo—or gumaganda lamang ang sales habang naiipit pa rin ang margins.

Originally published: July 29, 2026 · Last updated: July 29, 2026

Links to related posts

• WLCON Stock Study, Post 1: WLCON Series Introduction
• WLCON Stock Study, Post 2: WLCON Fundamental Analysis
• WLCON Stock Study, Post 3: WLCON Technical Analysis
• WLCON Stock Study, Post 4: WLCON Valuation
• WLCON Stock Study, Post 5: WLCON Risk Management
• WLCON Stock Study, Post 6: WLCON Capital Allocation

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Nilalaman

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Ang Punto ng Usapan

May hawak tayong 30,000 WLCON shares sa average net cost na ₱6.6183.

Sa last traded price na ₱5.68, ang position ay may net market value na ₱169,726.92, may unrealized loss na 14.52%, at bumubuo ng 14.84% ng kasalukuyang portfolio.

Hindi ito maliit na test position. Hindi rin ito simpleng stock na maaari nating tingnan nang pahapyaw habang naghihintay ng rebound.

Sa proposed MH 2.0 Inter-Equity Allocation, ₱150,000 lamang ang buong Medium Volatility Micro Harvesting pillar. Ibig sabihin, ang WLCON position natin ngayon ay mas malaki pa sa proposed allocation ng buong pillar.

Kaya ang fundamental analysis na ito ay hindi lamang tungkol sa tanong na:

Maganda pa ba ang kumpanya?

Mas mahalaga ang tanong na:

Sapat ba ang kalidad at recovery ng negosyo para manatiling malaking bahagi ng MH 2.0 portfolio ang WLCON?

Hindi pa natin sasagutin dito kung retain, bawas, o dagdag. Trabaho iyon ng Post 6. Ang ginagawa muna natin ngayon ay kilalanin kung ano talaga ang hawak natin.

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Ang Dating Paniniwala

Madaling maintindihan kung bakit naging kaakit-akit ang WLCON.

Wilcon Depot is one of the country’s largest home-improvement and construction-supplies retailers. Nagbebenta ito ng tiles, sanitary wares, plumbing products, hardware and tools, electrical and lighting products, furniture, appliances, paints, building materials, at iba pang gamit para sa construction, renovation, repair, at home improvement.

May recognizable brand ito, malawak na store network, at malinaw na physical-retail presence.

From only 73 stores in 2021, lumawak ang network sa:

• 83 stores noong 2022;
• 90 noong 2023;
• 100 noong 2024;
• 104 noong 2025;
• at 107 stores by the end of the first quarter of 2026.

Sa unang tingin, simple ang dating paniniwala:

Mas maraming stores, mas maraming customers, mas mataas na sales, at kalaunan mas mataas na earnings.

May historical basis naman iyon.

Net sales increased from ₱27.5 billion in 2021 to ₱33.6 billion in 2022, while net income climbed from ₱2.56 billion to a record ₱3.85 billion. Noong 2022, umabot din ang EBITDA sa ₱6.26 billion at EBIT sa ₱5.11 billion.

That period showed what WLCON could earn when strong demand, store productivity, and operating leverage worked together.

Pero hindi pala automatic na ang bawat bagong store ay agad na magdadala ng parehong quality of earnings.

Diyan nagsimulang maging mas komplikado ang kuwento.

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Ang Binagong Pananaw

Sa pagtingin natin sa reports mula 2021 hanggang Q1 2026, lumilitaw na may tatlong magkahiwalay na yugto ang WLCON story.

Mula Expansion Patungo sa Peak Earnings

Noong 2021 at 2022, malakas ang sales and earnings growth.

Net sales rose from ₱27.5 billion in 2021 to ₱33.6 billion in 2022, while net income advanced from ₱2.56 billion to ₱3.85 billion. Gross margin also improved from 37.3% to 39.1%.

Ito ang panahon kung kailan maganda ang combination ng demand, margins, at operating leverage.

Mula Peak Patungo sa Earnings Compression

Noong 2023, patuloy pang tumaas ang net sales to ₱34.6 billion, pero bumaba ang net income by 9.5% to ₱3.48 billion.

Hindi sales collapse ang nangyari. Ang problema ay mas mabilis ang pagtaas ng operating expenses kaysa sa paglago ng gross profit.

Operating expenses increased by 13.5%, largely because of expansion-related depreciation and amortization, outsourced services, trucking, and salaries. Meanwhile, comparable-store sales declined by 3.4%.

Noong 2024, mas naging malinaw ang pressure.

Net sales declined by 1.2% to ₱34.17 billion, while comparable-store sales fell by 6.2%. Net income dropped by 27.4% to ₱2.53 billion. Adjusted EBITDA declined by 21.3%, and adjusted EBIT fell by 28.0%.

Ito ang mahalagang pagbabago sa pananaw:

Hindi mahina ang WLCON dahil tumigil itong magbukas ng stores. Mahina ang earnings dahil patuloy ang expansion habang humina ang productivity ng existing stores at tumaas ang operating cost base.

Mula Compression Patungo sa Early Recovery

Noong 2025, bumalik sa growth ang net sales.

Sales reached ₱35.44 billion, up 3.7%, while gross profit rose by 2.5% to approximately ₱13.68 billion. Ngunit halos flat pa rin ang depot same-store sales, at bumaba nang bahagya ang gross margin from 39.1% to 38.6%. Net income declined another 3.3% to ₱2.45 billion.

Adjusted EBITDA improved by 2.6% to ₱4.77 billion, but adjusted EBIT decreased by 3.5% to ₱3.22 billion.

So, 2025 was not yet a full earnings recovery.

Mas tamang tawagin itong stabilization year:

• bumalik ang sales growth;
• bumagal ang pagtaas ng operating expenses;
• gumanda ang EBITDA;
• pero hindi pa bumabalik ang EBIT at net income sa growth.

Then came Q1 2026.

Net sales grew by 9.1% to ₱9.17 billion, supported by a 4.7% increase in comparable-store sales and sales contributions from newly opened branches. Net income increased by 4.9% to ₱563 million.

Ito ang pinakamalinaw na positive sign sa recent reports: hindi na lamang new stores ang nagtutulak ng sales. Pati existing stores ay nagpakita ng growth.

Pero hindi pa rin malinis ang recovery.

Gross margin fell by 180 basis points to 37.0%, partly because the share of higher-margin exclusive and in-house brands declined. Operating expenses increased by 7.8%, while EBIT margin slipped from 8.3% to 7.9%.

Kaya ang binagong pananaw natin ay ito:

WLCON appears to be moving from earnings contraction toward business recovery, but the recovery remains volume-led and has not yet translated into a convincing restoration of margins.

May improvement. Pero may trabaho pa.

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Paano Ito Umaandar

Ang Core Business ay Malawak, Pero Depot-Dependent

WLCON operates through two main retail formats:

• the large Wilcon Depot format; and
• the smaller Do It Wilcon format.

The depot format remains dominant, contributing roughly 96% of total sales. This means the company’s performance still depends heavily on traffic, transaction count, and basket size in its large-format stores.

Do It Wilcon is growing faster from a smaller base. In 2025, its sales increased by 12.8%, and same-store sales rose by 6.8%. However, the format represented only about 3.2% of total sales.

Promising ang smaller format, pero hindi pa ito sapat para baguhin agad ang earnings profile ng buong kumpanya.

Ang Store Expansion ay Growth Engine at Cost Burden

Wilcon’s store count nearly doubled from 54 locations in 2021 to 107 by Q1 2026.

This provides a wider market reach and a larger long-term revenue base. Pero bawat bagong store ay may kasamang:

• construction and renovation costs;
• additional inventory;
• salaries and outsourced services;
• utilities and trucking;
• depreciation;
• lease liabilities;
• at panahon bago maging fully productive ang branch.

The company’s reports repeatedly identify expansion-related costs as a major reason operating expenses increased faster than gross profit.

Hindi ibig sabihin na mali ang expansion.

Ang ibig sabihin lamang: may timing gap between opening stores and producing acceptable returns from those stores.

Same-Store Sales ang Mas Mahalagang Recovery Signal

Kapag sales growth ay galing lamang sa new stores, maaaring lumaki ang revenue habang hindi gumaganda ang productivity ng existing network.

Ganito ang nangyari sa recent years:

• 2023 comparable sales: −3.4%
• 2024 comparable sales: −6.2%
• 2025 comparable sales: approximately −0.3%
• Q1 2026 comparable sales: +4.7%

Ito marahil ang pinakamahalagang fundamental progression sa buong study.

From material contraction in 2024, halos naging flat in 2025, then turned positive in Q1 2026.

Isa itong credible early recovery signal.

Pero one quarter is not yet a full cycle. Kailangan nating makita kung mapapanatili ito nang hindi patuloy na nasasakripisyo ang gross margin.

Ang Margin ang Kasalukuyang Mahinang Bahagi

WLCON has historically benefited from exclusive and in-house brands, which tend to carry stronger margins.

Noong Q1 2026, bumaba ang contribution ng exclusive and in-house brands from 52.2% to 51.7% of sales. Kasabay nito, gross margin declined to 37.0% from about 38.8% a year earlier.

Mukhang maliit lamang ang pagbabago sa sales mix. Pero sa retail business na bilyon-bilyon ang revenue, even a modest margin contraction can materially affect earnings.

Kaya hindi sapat na bantayan lamang ang sales growth. Mahalagang tingnan kung:

• bumabalik ang higher-margin product mix;
• tumataas ang gross profit faster than sales;
• at bumababa ang operating expense ratio habang nagma-mature ang store network.

Malakas ang Liquidity, Ngunit Malaki ang Inventory

As of March 31, 2026, WLCON had:

• ₱1.71 billion in cash and cash equivalents;
• ₱1.45 billion in short-term investments;
• a current ratio of 2.44;
• and remained free of conventional bank borrowing, with most reported liabilities consisting of trade payables and lease liabilities.

This is a meaningful strength.

WLCON is not financing its expansion through heavy bank debt. It retains access to credit facilities but has historically funded much of its expansion internally.

At the same time, merchandise inventory stood at approximately ₱14.83 billion at the end of Q1 2026.

Normal na malaking bahagi ng balance sheet ang inventory para sa ganitong retailer. Pero dito rin nakatali ang maraming capital.

Inventory must eventually turn into sales at acceptable margins. Kapag bumagal ang demand, maaaring lumabas ang pressure through markdowns, storage cost, or slower cash conversion.

Gumanda ang Operating Cash Flow

One of the strongest Q1 2026 indicators was cash generation.

Net cash provided by operating activities increased to approximately ₱1.59 billion, compared with ₱1.08 billion in Q1 2025. The improvement was largely connected to lower inventory purchases and better working-capital movement.

Capital expenditures during the quarter were approximately ₱417 million, mainly for new stores, renovations, and warehouses.

This means operating cash flow comfortably exceeded quarterly capital expenditure.

Magandang development ito. Ngunit dapat din nating tandaan na part of the improvement came from inventory management rather than earnings growth alone.

May Dividend, Pero Hindi Ito Dividend-Harvester Role

WLCON declared cash dividends of:

• ₱0.26 per share in 2024;
• ₱0.36 per share in 2025;
• and ₱0.40 per share in 2026.

For our 30,000-share position, the ₱0.40 dividend corresponds to ₱12,000 gross cash dividends, before applicable taxes.

Helpful ang dividend. Pero hindi natin dapat i-classify ang WLCON as a Low Volatility Dividend Harvester dahil lamang may regular cash distribution.

Its business is tied to home construction, renovation activity, discretionary household spending, store expansion, and economic cycles. Its earnings and market price have also shown greater variability than the stocks intended for our dividend-harvesting pillar.

Sa MH 2.0, supporting feature lamang ang dividend. Hindi iyon ang pangunahing role thesis.

The Balance Sheet Needs Proper Interpretation

WLCON reported a debt-to-equity ratio of 0.72 at the end of Q1 2026. On the surface, maaaring mukhang may malaking debt burden. Pero the reported liability figure includes substantial lease liabilities under PFRS 16.

The company remained bank debt-free. Its interest expense largely represents accounting interest on lease liabilities rather than conventional interest-bearing bank loans.

Hindi ibig sabihin na walang economic obligation ang leases. Totoong cash commitment ang rental and lease payments.

Pero kailangan itong ihiwalay conceptually from a company carrying large amounts of ordinary bank debt.

May Related-Party Exposure

Wilcon leases many store sites from its parent company and other related entities.

Q1 2026 disclosures show continuing lease transactions, advance rent, security deposits, and lease payments involving related parties.

Management states that related-party arrangements are evaluated using independent third-party appraisals. Still, this remains an area that deserves monitoring because a large part of the operating network relies on properties connected to controlling shareholders.

Hindi ito automatic red flag. Pero governance item ito na hindi dapat kaligtaan.

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Pangwakas na Kaisipan

The WLCON fundamentals do not show a broken business.

The company still has:

• a nationally recognized retail brand;
• a large and expanding store network;
• a broad product portfolio;
• positive operating cash flow;
• strong liquidity;
• no conventional bank debt;
• and an early recovery in comparable-store sales.

Pero hindi rin natin maaaring sabihin na fully restored na ang earnings engine.

From the 2022 peak, net income fell from ₱3.85 billion to ₱2.45 billion in 2025. EBIT margin declined from 15.2% to 9.1%, while net margin fell from 11.5% to 6.9%.

Q1 2026 brought encouraging sales and same-store growth. Yet margin compression remained visible.

So our current fundamental conclusion is:

WLCON is an established retailer showing early signs of demand recovery, but its earnings quality is still being tested by lower margins and the continuing cost of expansion.

That conclusion neither commands us to buy nor forces us to sell.

What it does is clarify the burden of proof.

For WLCON to justify occupying the entire ₱150,000 Medium Volatility Micro Harvesting pillar, we will eventually want to see more than a low market price and one quarter of improving sales.

We need evidence that:

• comparable-store growth can persist;
• gross margin can stabilize;
• newer stores can mature into productive assets;
• and earnings can finally grow faster than the operating cost base.

Sa madaling sabi, bumabangon ang negosyo—but we still need to see whether it can stand steadily on its own feet. Aba’y hindi tayo magmamadali.

The next post will examine whether the chart is already confirming that recovery—or whether the market remains unconvinced.

---

Shariah Compliance Advisory (Updated Nov 26, 2025)

The PSE has confirmed that its Shariah screening program is currently paused, with no new lists to be released until their internal review is completed. Although news outlets reported quarterly updates up to mid-2025, these later lists are no longer accessible on the PSE website.

For now, the PSE’s Shariah-Compliant Securities page and all past lists have been removed from the public website. The December 24, 2024 list is the last official version in Micro Stock Trader’s possession, downloaded before the page was taken down, although other investors may still hold later copies such as the reported July 4, 2025 release.

All halal-focused strategies under Micro Stock Trader will use a conservative, self-screened approach until official guidance resumes, in shā’ Allāh.

• Micro Stock Trader: 2024 List of Shariah-Compliant Stocks at PSE – As of December 25, 2024

Ang post na ito ay bahagi ng aming personal learning journey sa securities analysis at portfolio governance. Ang mga konseptong may kaugnayan sa interest-based instruments, conventional bonds, preferred shares, o iba pang financial arrangements ay binabanggit lamang bilang bahagi ng academic coverage ng module at hindi bilang rekomendasyon o endorsement.

---

Disclaimer

This post is for educational and documentation purposes only. It is not investment advice. Perform your own due diligence and consult qualified financial professionals before making investment decisions. All strategies, frameworks, and examples described here reflect the personal methodologies of Micro Stock Trader and are not guarantees of future performance.

---

Micro Stock Trader Blog

Board Lot Warrior

Ang Inyong Batangueñong Retail Stock Trader

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TEL Stock Study, Post 2: TEL Fundamental Analysis — Matatag ang Cash Engine, Pero Mabigat ang Leverage

Home › Board Lot Warrior › Micro Harvesting › Micro Harvesting 2.0 › MH Application Series › TEL Stock Study › TEL Fundamental Analysis

TEL fundamental analysis through revenue quality, cash generation, capital intensity, leverage, and dividend sustainability.

👉 Explore the full Micro Harvesting 2.0 framework

👉 Start Here | CSSC Learning Series | MH Application Series | MH Operator Journal

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TEL remains one of the strongest dividend engines in our Micro Harvesting portfolio, but a high dividend alone does not make a stock fundamentally strong.

In this post, we examine whether PLDT’s earnings, operating cash flow, capex direction, debt load, and business mix can continue supporting the role we assigned to TEL as a Low Volatility Dividend Harvester.

Originally published: July 27, 2026 · Last updated: July 27, 2026

Links to related posts

• TEL Stock Study, Post 1: TEL Series Introduction
• TEL Stock Study, Post 2: TEL Fundamental Analysis
• TEL Stock Study, Post 3: TEL Technical Analysis
• TEL Stock Study, Post 4: TEL Valuation
• TEL Stock Study, Post 5: TEL Risk Management
• TEL Stock Study, Post 6: TEL Capital Allocation

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Nilalaman

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Ang Punto ng Fundamental Analysis

Hindi natin ginagawa ang fundamental analysis para lamang masabi kung maganda o pangit ang isang kumpanya.

Sa Micro Harvesting, mas practical ang tanong:

Kaya ba ng negosyo na suportahan ang role na ibinigay natin dito sa portfolio?

Para sa TEL, ang role ay malinaw.

Hindi natin ito pangunahing hinahawakan bilang mabilis na rotation stock. Itinuturing natin itong Low Volatility Dividend Harvester at recovery anchor—isang malaking position na inaasahang magbigay ng regular cash dividends habang hinihintay ang price recovery at valuation repair.

Kaya ang fundamental analysis natin ay nakatuon sa limang bagay:

• revenue durability;
• operating cash generation;
• dividend capacity;
• capital-expenditure requirements;
• at leverage.

Hindi sapat na mataas ang dividend. Kailangan itong suportado ng matatag na operating business at tunay na cash flow.

Ano ang Negosyo ng PLDT?

Ang PLDT Group ay hindi na simpleng landline company.

Ang negosyo nito ay nakasentro sa tatlong major segments:

• Wireless
• Fixed Line
• Others

Sa Wireless side, kabilang ang mobile services, fixed wireless broadband, at related services.

Sa Fixed Line side, kasama ang home broadband, enterprise data, voice, data centers, cloud, cybersecurity, managed IT, at iba pang digital services.

Sa Others, kabilang ang investments sa digital platforms at financial technology, tulad ng Maya-related interests at iba pang technology ventures.

PLDT also operates through subsidiaries and platforms such as Smart, ePLDT, VITRO, and PLDT Global. ePLDT provides cloud, cybersecurity, data, and artificial-intelligence solutions, while VITRO operates carrier-neutral data centers, including the AI-ready hyperscale facility in Santa Rosa.

This diversified structure is an important fundamental strength.

Ang TEL ay hindi lamang nakaasa sa prepaid mobile load o traditional voice revenues. Ang cash engine nito increasingly depends on mobile data, fiber broadband, enterprise connectivity, data centers, cloud, cybersecurity, and digital infrastructure.

Ang Revenue Trend

PLDT’s consolidated revenues increased steadily from:

• ₱181.00 billion in 2020
• ₱192.19 billion in 2021
• ₱204.36 billion in 2022
• ₱210.95 billion in 2023
• ₱216.83 billion in 2024
• ₱218.39 billion in 2025

This is not explosive growth, but it is persistent.

From 2020 to 2025, revenues increased by roughly 21%. The pattern suggests that PLDT is already a mature company, but not a stagnant one. Its growth profile is gradual and infrastructure-driven rather than hypergrowth.

Service revenues also increased from ₱173.63 billion in 2020 to ₱212.19 billion in 2025.

For a Low Volatility Dividend Harvester, this is generally favorable.

Hindi kailangan ng TEL ang napakabilis na revenue growth. Ang kailangan nito ay:

• stable or gradually rising revenues;
• high recurring service income;
• at sufficient cash generation to fund both capex and dividends.

Sa Q1 2026, consolidated revenues reached ₱56.51 billion, up around 2% from ₱55.28 billion in Q1 2025.

So far, the latest quarter did not indicate a collapse in the top line. Growth remained modest but positive.

EBITDA at Operating Strength

EBITDA is one of PLDT’s principal operating-performance measures.

The historical trend shows:

• ₱88.78 billion in 2020
• ₱96.18 billion in 2021
• ₱100.59 billion in 2022
• ₱104.30 billion in 2023
• ₱108.52 billion in 2024
• ₱111.23 billion in 2025

This is a much cleaner operating trend than reported net income.

From 2020 to 2025, EBITDA increased by approximately 25%. The EBITDA margin remained near the low-50% range, reflecting the high fixed-cost but strongly cash-generative nature of the telecom business.

Q1 2026 EBITDA reached ₱28.29 billion, up around 2% year on year, while EBITDA margin remained at 52%.

This is one of the strongest parts of the TEL fundamental case.

The business continues to produce substantial operating cash earnings even while revenues grow slowly.

Pero may mahalagang warning.

EBITDA is not free cash flow.

PLDT itself notes that EBITDA excludes depreciation, financing costs, taxes, and capital expenditures. Because telecom is highly capital-intensive, hindi natin puwedeng gamitin ang EBITDA na parang cash available na agad sa shareholders.

So EBITDA tells us that the engine is running.

It does not yet tell us how much cash remains after keeping the network alive.

Net Income, Core Income, at Telco Core Income

PLDT reports several earnings measures:

• reported net income;
• core income;
• telco core income.

Reported net income can be affected by one-off or nonrecurring items such as:

• tower-sale gains;
• accelerated depreciation;
• foreign-exchange movements;
• derivative gains or losses;
• impairments;
• and other accounting adjustments.

This was particularly visible in 2022, when reported net income dropped to ₱10.74 billion, even though EBITDA and telco core income remained comparatively strong.

Reported net income later recovered to:

• ₱26.82 billion in 2023
• ₱32.56 billion in 2024
• ₱30.22 billion in 2025

By comparison, telco core income moved more steadily:

• ₱28.09 billion in 2020
• ₱30.35 billion in 2021
• ₱33.30 billion in 2022
• ₱34.34 billion in 2023
• ₱35.14 billion in 2024
• ₱33.93 billion in 2025

This is why telco core income matters to us.

PLDT uses telco core income as one of the bases for determining dividend payouts. It adjusts reported earnings for nonrecurring items and certain non-telco effects, including Maya-related results and asset-sale gains.

From an MH dividend perspective, telco core income is more relevant than headline net income.

But it should not be treated as a substitute for actual cash flow. It is still a management-adjusted earnings measure.

Ang Papel ng Wireless at Fixed Line

The PLDT Group’s operating structure shows an important transition.

Wireless remains a major revenue contributor, but Fixed Line has become increasingly important because it includes:

• home broadband;
• enterprise data;
• cloud;
• data-center services;
• cybersecurity;
• and managed digital solutions.

In 2024, Wireless generated approximately ₱105.73 billion in revenues, including ₱97.78 billion in service revenues. Mobile service revenues increased by 2% to ₱96.25 billion.

However, the segment contribution to core earnings shows that Fixed Line has become a major economic driver.

In 2024, the Fixed Line segment accounted for a much larger amount of segment core income than Wireless before intersegment eliminations.

This is fundamentally important.

The PLDT story is no longer merely:

Smart versus competing mobile networks.

It increasingly includes:

fiber broadband, enterprise connectivity, cloud, AI infrastructure, cybersecurity, and data centers.

That diversification reduces dependence on one revenue stream—but it also requires ongoing investment.

Broadband, Mobile, at Subscriber Trends

Subscriber numbers need careful interpretation.

PLDT’s reported mobile subscribers declined from more than 72 million in 2020 to around 57.8 million in 2023, before recovering to around 59.0 million in 2024 and 59.9 million in 2025.

The decline partly reflects structural and regulatory changes, including SIM registration and market cleanup, rather than simply economic collapse.

More important is the movement in broadband.

Fixed-line broadband subscribers increased from approximately:

• 2.27 million in 2020
• 2.97 million in 2021
• 3.25 million in 2022
• 3.27 million in 2023
• 3.43 million in 2024
• 3.79 million in 2025

This suggests that the structural demand for fiber and home broadband remains intact.

The fixed-line voice subscriber base has gradually declined, but that is expected in a world moving toward mobile and internet-based communication.

The more relevant question is whether higher-value data revenues can replace legacy voice.

So far, the answer appears to be yes—but at a mature growth rate rather than an explosive one.

Capex Normalization

Capex is one of the most important fundamental variables for PLDT.

Reported capital expenditures rose sharply during the network-investment cycle:

• ₱71.90 billion in 2020
• ₱88.98 billion in 2021
• ₱96.81 billion in 2022

Then capex began to decline:

• ₱85.08 billion in 2023
• ₱78.25 billion in 2024
• ₱60.34 billion in 2025

This is a potentially favorable transition.

The network has already absorbed several years of heavy investment in:

• fiber;
• LTE and 5G;
• transport capacity;
• international connectivity;
• data centers;
• cybersecurity;
• and enterprise infrastructure.

If capex normalizes without damaging service quality or competitiveness, more operating cash flow can become available for:

• dividends;
• debt reduction;
• or selective growth investments.

Pero hindi natin dapat sabihing tapos na ang capex.

Telecom assets require continuous maintenance and upgrading. Data usage grows, technology changes, and network resilience requires recurring investment.

The proper conclusion is:

PLDT appears to be moving away from peak capex, but not into a low-capex business model.

This distinction matters.

Cash Flow at Dividend Sustainability

For dividend harvesting, cash flow is more important than accounting earnings.

PLDT’s operating cash flow improved materially in 2025. Based on our cash-flow normalization, net cash from operating activities reached approximately ₱98.74 billion, while cash paid for property and equipment plus capitalized interest was around ₱62.86 billion.

This left a simple cash-flow proxy of approximately ₱35.87 billion before financing and other adjustments.

Using the trailing period through March 2026, our normalized operating-cash-flow-less-cash-capex estimate was approximately ₱37.83 billion.

That amount is relevant because the annual regular dividend requirement at approximately ₱95 per share is roughly ₱20.5 billion for 216.06 million shares.

The relationship suggests that the regular dividend remains supportable under the current cash-generation and capex profile—provided that:

• operating cash flow remains stable;
• capex does not surge back toward peak levels;
• and debt servicing remains manageable.

PLDT’s regular dividends were broadly stable in recent years, while special dividends in 2022 and 2023 were linked to nonrecurring events and should not be treated as permanent. The 2025 annual dividend was around ₱94–₱95 per share, close to our normalized sustainable estimate.

This supports TEL’s dividend-harvester role.

But the dividend is not risk-free.

It competes with capex and debt for the same cash.

Ang Mabigat na Bahagi: Debt at Leverage

The biggest fundamental weakness is leverage.

Net debt increased from:

• ₱181.65 billion in 2020
• ₱228.66 billion in 2021
• ₱225.67 billion in 2022
• ₱239.76 billion in 2023
• ₱273.03 billion in 2024
• ₱284.69 billion in 2025

Over the same period, nominal short- and long-term debt reached approximately ₱296.94 billion by end-2025.

This means the company’s operating strength is accompanied by a heavy financing burden.

Financing costs also increased. In 2024, financing costs were approximately ₱15.5 billion, versus ₱13.8 billion in 2023 and ₱11.8 billion in 2022.

The consequence is clear:

Higher interest expense can absorb part of the benefit from EBITDA growth and capex normalization.

From an MH perspective, debt matters in three ways.

First, it reduces the equity value attributable to shareholders.

Second, it limits flexibility in dividends and capital allocation.

Third, it makes TEL sensitive to interest rates, refinancing conditions, and peso weakness.

Leverage does not automatically invalidate the TEL thesis. Telecom businesses often carry substantial debt because they operate long-lived infrastructure assets.

But TEL cannot be treated like a debt-light consumer company.

Ang Emerging Growth Engines

The most interesting part of the long-term fundamental story lies outside traditional telecom.

VITRO and data centers

VITRO operates a nationwide carrier-neutral data-center network and launched an AI-ready hyperscale data center in Santa Rosa.

This gives PLDT exposure to:

• cloud migration;
• artificial intelligence workloads;
• enterprise digitization;
• data localization;
• and hyperscale demand.

ePLDT, cloud, and cybersecurity

ePLDT provides cloud, cybersecurity, data, and AI solutions to enterprise and public-sector clients. It also operates a sovereign-cloud offering designed to keep sensitive data within Philippine jurisdiction.

These businesses may have stronger structural growth than traditional voice or SMS.

Maya

Maya remains a source of optionality.

PLDT’s investment interest in Maya’s holding company stood at 37.66% at end-2025. Maya reported revenue growth from ₱8.55 billion in 2023 to ₱14.09 billion in 2024 and ₱17.58 billion in 2025, while moving from large losses to a reported gain in 2025.

This is not yet the central reason for holding TEL.

But it may become a source of future value if profitability proves sustainable.

Fundamental Strengths

The strongest parts of the TEL fundamental case are:

Durable recurring revenues.
Service revenues have continued to rise despite the maturity of the telecom market.

High and stable EBITDA generation.
EBITDA exceeded ₱111 billion in 2025 and remained near a 52% margin in Q1 2026.

Growing fixed-broadband base.
Fiber and broadband subscribers continued expanding.

Capex normalization.
Reported capex declined materially from the 2022 peak.

Dividend-supporting telco core income.
Telco core income has remained broadly stable above ₱33 billion in recent years.

Emerging digital infrastructure.
Data centers, cloud, cybersecurity, AI infrastructure, and Maya provide additional optionality.

Fundamental Risks

The main weaknesses and risks are:

High leverage.
Net debt continued to rise and reached approximately ₱284.69 billion in 2025.

Increasing financing costs.
Higher interest expense can offset operating improvements.

Mature revenue growth.
PLDT is growing, but slowly.

Capital intensity.
Even after normalization, capex remains substantial.

Competitive pressure.
Mobile, broadband, enterprise, and digital infrastructure remain highly competitive.

Dividend dependence on multiple conditions.
The payout depends not only on earnings, but also on capex, liquidity, debt, and management policy.

Sensitivity to regulation and technology.
Telecom companies operate under regulatory oversight and must continuously adapt to new technology.

Ang MH Fundamental Verdict

Based on the available financial statements through Q1 2026, TEL remains fundamentally qualified for its role as a Low Volatility Dividend Harvester.

The reasons are:

• recurring service revenues;
• stable EBITDA;
• resilient telco core income;
• improving cash conversion;
• declining capex from peak levels;
• and a regular dividend that appears supportable under the current operating profile.

But this qualification is not unconditional.

TEL’s high debt and financing burden prevent us from treating it as a low-risk stock in the absolute sense.

The correct classification is closer to:

A mature, cash-generative, dividend-paying infrastructure company with improving capex economics—but with material leverage that must remain under continuous governance.

For MH, that means:

• dividends remain the primary harvest;
• rotation is secondary;
• additions should require valuation and technical permission;
• and capital allocation should remain disciplined because the existing position is already large.

Fundamentally, TEL passes.

But it passes with a debt warning.

Pangwakas na Kaisipan

The TEL fundamentals tell a balanced story.

The business is not deteriorating.

Revenue and EBITDA remain resilient. Broadband continues to grow. Capex has declined from the peak investment cycle. Telco core income remains strong enough to support regular dividends. Digital infrastructure businesses provide future optionality.

But the company also carries significant debt, rising financing costs, and continuing capital requirements.

So the fundamental conclusion is not:

TEL is unquestionably cheap and safe.

The better conclusion is:

TEL remains a strong operating and dividend platform, but its value to common shareholders depends on continued cash-flow discipline, capex normalization, and control of leverage.

This is why fundamental analysis cannot stand alone.

The next step is technical analysis.

Fundamentals tell us whether TEL deserves a place in the portfolio.

Technical analysis will help determine whether the present price location gives us permission to act.

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Shariah Compliance Advisory (Updated Nov 26, 2025)

The PSE has confirmed that its Shariah screening program is currently paused, with no new lists to be released until their internal review is completed. Although news outlets reported quarterly updates up to mid-2025, these later lists are no longer accessible on the PSE website.

For now, the PSE’s Shariah-Compliant Securities page and all past lists have been removed from the public website. The December 24, 2024 list is the last official version in Micro Stock Trader’s possession, downloaded before the page was taken down, although other investors may still hold later copies such as the reported July 4, 2025 release.

All halal-focused strategies under Micro Stock Trader will use a conservative, self-screened approach until official guidance resumes, in shā’ Allāh.

• Micro Stock Trader: 2024 List of Shariah-Compliant Stocks at PSE – As of December 25, 2024

Ang post na ito ay bahagi ng aming personal learning journey sa securities analysis at portfolio governance. Ang mga konseptong may kaugnayan sa interest-based instruments, conventional bonds, preferred shares, o iba pang financial arrangements ay binabanggit lamang bilang bahagi ng academic coverage ng module at hindi bilang rekomendasyon o endorsement.

---

Disclaimer

This post is for educational and documentation purposes only. It is not investment advice. Perform your own due diligence and consult qualified financial professionals before making investment decisions. All strategies, frameworks, and examples described here reflect the personal methodologies of Micro Stock Trader and are not guarantees of future performance.

---

Micro Stock Trader Blog

Board Lot Warrior

Ang Inyong Batangueñong Retail Stock Trader

Home | About Us | Contact Us | Privacy Policy | Terms of Use | Disclaimer