Stock Analysis of Double Dragon

History

• DoubleDragon Properties Corp., the real estate firm owned by Mang Inasal founder Edgar ‘Injap’ Sia II and Jollibee Foods Corp. owner Tony Tan Caktiong.

• DoubleDragon Properties was founded in 2003 by Edgar “Injap” Sia II, 39, a college architecture dropout from Bacolod in west central Philippines.   He is the chairman and CEO of DoubleDragon.  

• At 33, six years ago, he became the country’s youngest billionaire, when he sold his Mang Inasal barbecue chicken food chain for P3 billion to Jollibee.   This enabled Injap to become a billionaire faster than Henry Sy Sr., John Gokongwei Jr., and Tony Tan Caktiong did in their time.

• DoubleDragon Properties was a wholly-owned subsidiary of Injap Investments Inc. until July 2012 when Sia   formed a joint venture with Tan Caktiong, founder of Jollibee and buyer of 70 percent of his Mang Inasal. A third partner is the giant SM Investments Corp. which owns 34 percent of DoubleDragon’s subsidiary, CityMall Commercial Centers Inc.

• As a property developer, DoubleDragon’s goal is one million square meters of leasable space in five years.  

• Of that, 70 percent will come from the 100 malls (each with an average leasable space of 7,000 sqm), while 30 percent (300,000 sqm) will come from a 4.8-hectare commercial block BPO and office building at the Mall of Asia called DD Meridian Park, with 280,000 sqms leasable, and the 40-story Jollibee Tower in Ortigas, with 47,909 sqm leasable.

• The CityMall brand is thus poised to become the largest branded community mall player in the Philippines.   Twenty-five additional CityMalls are being constructed simultaneously across the country and are expected to be turned over to tenants by the end-2016.  

• DoubleDragon has secured 44 locations so far for its malls, reveals Sia.• On DoubleDragon’s outlook, Sia says “Investors can see our vision makes sense,

and maybe they are confident with our dynamic team to execute the laid out plans.”

• Injap is sure that the CityMall space will be leased.   “We have the strongest retail brands in the country,” he points out. In non-food, locators are BDO, Chinabank, Savemore, Ace Hardware, Watsons (drugstore), SM Appliance, and Simply Shoes.  

• Among the food brands are Jollibee, the biggest fast food chain; Chowking, the biggest Chinese food chain; Mang Inasal, the biggest barbecue chicken chain; along with Red Ribbon, Greenwich pizza, and Highlands Coffee.

• With 100 malls, Injap doesn’t think he would have competitors. He cites four factors—first mover advantage, familiarity of the provincial landscape (the malls will be located in third-tier cities, those with population of 100,000 or less and where the likes of SM and Robinson’s don’t have the time and the scale to be viable), the scarcity of prime city center sites (Injap says a big mall like SM needs about six hectares), and less operational baggage (DD is lean but mean).

• In less than two years since its initial public offering, DoubleDragon has already secured over two-thirds of the land bank it needs to develop to meet its goal of having one million square meters of leasable space by 2020.

• DoubleDragon said 70 percent of its intended leasable portfolio will be coming from the development of 100 CityMalls  across the provincial cities of the Philippines for which it has already secured over 45 prime commercial  sites.

Why Double Dragon Became an Active Stock

• CityMall - Kalibo NOW OPEN!

• On Monday April 25, 2016, CityMall - Kalibo opens its door to the public.

• Another CityMall OPENS Today 3pm May 7 at Tiaong Quezon.

• (Open Daily 9am-9pm)

• Major Tenants are SM Savemore, Jollibee, Mang Inasal, Chowking, Red Ribbon Bakeshop, Highlands Coffee, Watsons Pharmacy, SM Appliance, BDO Bank, Fun Nation Amusement, Rodeo Drive Apparel, Nail Cocktails, Cut Salon, Potato Corner, Mr Donut, Zagu, Egg Station, Kettle Corn, M1 My Basics Department Store, Expressions Bookstore, Ace Hardware, and SM Simply Shoes. - Watch Out for more CityMalls opening soon near you!

DD: Compared in the same industryDouble Dragon’s market capitalization is Php143.8b, already surpassing RLC’s (Robinsons Land) market cap of Php122.2b and MEG’s (Megaworld) Php143.5b. Out of the 300+ companies listed in the PSE, DD is already the 26th highest in terms of market capitalization. Against other property stocks in the PSEi, table below presents how the stock fares against its industry peers by end 2016:

DoubleDragon starts P10B preferred shares offering

• PROPERTY developer DoubleDragon Properties Inc. rolled out on Tuesday an offering of up to P10 billion preferred shares convertible into common shares, setting the dividend rate of 6.4778 percent per annum.

• The offering has been oversubscribed, with underwriters so far receiving P26 billion worth of demand or five times the base offering of P5 billion, DoubleDragon chief executive officer Edgar Sia II said on Tuesday.

• Following the approval given by the Securities and Exchange Commission on this offering, Sia said the offering had started on Tuesday (March 29) and would run until April 7.

DD: Stock Chart

DD: Stock Chart

Ooops!! Please take note: DOWNTREND

SELL SIGNAL

Double Dragon Stock

Double Dragon Stock

Take Note: The P/E Ratio is high, which means the stock is

overpriced.

Rule: High P/E ratio means the stock is expensive. Benjamin Graham said buy stocks with

less than 20 P/E ratio

DD: Stock ChartAlways observe that a stock moves to its average. It goes up or goes down

BUT IT ALWAYS MOVES OR GOES BACK TO AVERAGE. The average is a

FUNDAMENTAL EVIDENCE while stock price movements are TECHNICAL

EVIDENCE.

THEREFORE TARGET PRICE FOR DOUBLE DRAGON IS PHP. 35.00

DD: Stock Chart

SELL NOW

Other Corporate News

• TEL, GLO studying buyout of LIB minorityPLDT and Globe Telecom are looking into the possibility of buying out the minority shareholders of Liberty Telecoms Holdings,Inc. after taking over SMC’s telecommunications business. Liberty Telecoms has 1,293,656,429 shares outstanding. The company’s public free float stands at 12.82%.

Decision: BUY SIGNAL

• MEG to generate P3b from Makati projectMegaworld Corp. expects to generate P3b worth of sales from its latest residential condominium in the Makati Central Business District. It will build a 30-storey residential tower along L.P. Leviste Street in Salcedo Village. At present, the project called as The Ellis sells for P180,000 per sqm. Target completion date of the residential tower is slated for 2022.

Decision: BUY SIGNAL

THANKS!!!