COL FINANCIAL GROUP, INC.

PHILIPPINE EQUITY RESEARCH

Strategy Report

April Lee-Tan, CFA

COL HEAD OF RESEARCH
Recommended [email protected]

Stock List for EIP

1 OCT 2014 + 632 636 5411

The Stock List for EIP is a selection of Premium Growth Stocks and Securities that are carefully selected by the COL
Research Team. These companies and securities are expected to continue generating shareholder value in the long-
term.

EIP List of Companies

INCLUSION PRICE AS OF
COMPANY NAME NOTES
DATE INCLUSION DATE
BANKS
Currently the largest bank in the country, consistently
delivering above average asset growth during the
BDO Banco De Oro 18-Feb-11 Php 47.90 past few years. Major beneficiary of economic growth
as demand for loans should grow.

Identified as the 3rd largest and consistently ranked

Bank of Philippine as the most profitable bank in the Philippines.
BPI 01-Aug-08 Php 42.00
Islands Major beneficiary of economic growth as demand for
loans should grow.

Identified as the 2nd largest bank in the country with a

Metropolitan Bank strong balance sheet and improving earnings
MBT 18-Feb-11 Php 59.85
& Trust performance.Major beneficiary of economic growth
as demand for loans should grow.

CONGLOMERATES
Founded in 1834, AC is one of the oldest and largest
conglomerates operating in the Philippines with a
reputation of excellence. It owns shares in Ayala
Ayala Corp. Land, BPI, Manila Water and Globe, which are
AC 18-Feb-11 Php 335.00 among the market leaders in their industries.
Diversification into power and infrastructure should
also help drive long term growth and increase AC's
defensive sources of income and cash flow.

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Strategy Report
GTCAP is the holding company for the Ty family's
investments in the banking, real estate, automotive,
power and insurance industries through Metrobank,
Federal Land, Toyota Motor Philippines, Global
Business Power and AXA.
GTCAP GT Capital Holdings ** 01-Oct-14 Php 1,035.00
NEW The conglomerate is well positioned to benefit from
the country's favorable growth outlook given its focus
on less defensive but higher growth industries and
the synergies that can be generated within the
various subsidiaries.
SM is one of the largest conglomerates in the
Philippines owning shares in the country's market
leaders - SM Retail, SM Prime and BDO. Size
SM Investments provides it with numerous advantages over
SM Corp. 18-Feb-11 Php 475.40 competitors, such as greater cost efficiency and
stronger bargaining power.
Despite its size, SM continues to grow all it
businesses aggressively as it seeks to capitalize on
the favorable outlook of the consumer segment.
CONSUMER
Beneficiary of growing consumer spending locally
being the dominant market leader in the fast food
Jollibee Foods Corp. industry. Local brands include Jollibee, Chowking,
JFC 01-Aug-08 Php 36.50 Mang Inasal, Red Ribbon and Burger King.
The company is also expanding in China, the US,
Middle-East and Southeast Asia.

Beneficiary of growing consumer spending locally

Universal Robina being the market leader in numerous snack food
URC Corp. 18-Feb-11 Php 34.15 categories.
Successful entry into emerging Asian markets to help
drive faster earnings growth in the future.

INFRASTRUCTURE
Beneficiary of the expected growth in infrastructure
spending given the size of its construction subsidiary
and reputation for quality.
DMC DMCI Holdings, Inc. 18-Feb-11 Php 34.00
Company's strategy of shifting to higher value added
businesses from pure construction should enhance
profitability.

Beneficiary of the expected growth in infrastructure

Metro Pacific spending given its strategy of investing in
MPI 18-Feb-11 Php 3.63
Investments infrastructure businesses that are suffering from
underinvestment.

One of the most efficient and profitable water

Manila Water distribution companies globally.
MWC Company 01-Aug-08 Php 15.00 Earnings growth will be driven by the growing
population of its concession area and the company's
strategy of looking for new concession areas.

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Strategy Report

Intl Container Beneficiary of strong growth in emerging markets

ICT Terminal Services 18-Feb-11 Php 42.00 given location of existing ports and strategy of
acquiring ports in emerging markets.

POWER
Largest power distributor in the Visayas and
Mindanao region.
Aboitiz Power Corp.
AP 18-Feb-11 Php 28.30 Also has a growing power generation portfolio which
includes several renewable energy plants, protecting
it from rising fuel costs.
A pure renewable energy power generation
PNOC Energy company, which protects the company against
EDC Development Corp. 18-Feb-11 Php 5.72 potential increases in fuel costs.
Plans to expand its power generation portfolio should
drive earnings growth.

PROPERTY
Major beneficiary of the secular uptrend of the
property industry being one of the biggest property
developers with a strong balance sheet, huge land
Ayala Land, Inc.
ALI 01-Aug-08 Php 10.00 bank and strong branding.
Aside from residential developments, ALI has a huge
leasing portfolio comprised of malls, offices and
hotels, providing it with recurring cash flow.
SMPH is the property arm of the SM Group with
exposure to retail, office, residential, and tourism
properties.
SM Prime Holdings SMPH is also a good play on the Philippine consumer
SMPH 01-Aug-08 Php 10.78 market as it is the biggest mall operator in the
Philippines. Despite its diversified property holdings,
SMPH gets more than 70% of its income from malls
and other rental properties making it a highly
defensive property company.
RLC is the property arm of JG Summit largely
focused on earning rental income from malls, offices,
Robinsons Land and hotels making it a highly defensive property
company. It is currently the 2nd largest mall operator
RLC Corp.** NEW 01-Oct-14 Php 24.00 in the country.
RLC is also engaged in residential developments,
although this segment accounts for only 35% of
revenues and around 22% of income.
TELECOM
Philippine Long
The dominant and most profitable
TEL Distance Tel. Co. 01-Aug-08 Php 2,300.00
telecommunications company in the country.

EXCHANGE TRADED FUND

A security issued by First Metro that is supposed to
FMETF
First Metro Phil. track the performance of the PSEi.
01-Oct-14 Php 117.40
Equity ETF** NEW This security allows small investors to enjoy the
benefits of diversification at an affordable price.

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Strategy Report

* Criteria used for EIP Stock Selection Growing Industry / Earnings Visibility / Management Credibility / Superior Products or
Services / and a Strong balance sheet.
** NEW Indicates the companies recently added to our Easy Investment Program list.

ACTUAL PERFORMANCE OF EIP STOCKS

Period Covered: From EIP launch date of 08/01/08 to 09/30/14 (74 months)
Monthly Investment: Php 5,000 assumes that you fully invested entire amount every month.

Average Purchase Current Market

Price as of launch Price as of Total %Effective
Price per Share Value of EIP
date 8/1/08 9/30/2014 Investment Annual Yield
under EIP Portfolio

ALI PHP 9.80 PHP 34.95 PHP 18.79 PHP 370,000 PHP 922,157 29.5%
BPI PHP 38.66 PHP 98.00 PHP 64.40 PHP 370,000 PHP 704,603 20.7%
JFC PHP 37.00 PHP 196.00 PHP 97.78 PHP 370,000 PHP 1,005,179 32.5%
MWC PHP 17.00 PHP 29.50 PHP 21.66 PHP 370,000 PHP 613,430 16.2%
SMPH PHP 5.84 PHP 17.48 PHP 11.49 PHP 370,000 PHP 692,694 20.1%
TEL PHP 2,500 PHP 3098.00 PHP 2594.37 PHP 370,000 PHP 559,766 13.2%

Average Purchase Current Market

Price as of launch Price as of Total %Effective
Price per Share Value of EIP
date 3/1/11 9/30/2014 Investment Annual Yield
under EIP Portfolio

AC PHP 320.67 PHP 740.00 PHP 488.82 PHP 215,000 PHP 365,905 30.9%
AP PHP 30.00 PHP 40.75 PHP 34.13 PHP 215,000 PHP 280,537 15.0%
BDO PHP 46.82 PHP 98.05 PHP 71.13 PHP 215,000 PHP 324,724 23.6%
DMC PHP 37.35 PHP 78.95 PHP 54.64 PHP 215,000 PHP 354,477 28.9%
EDC PHP 6.01 PHP 8.09 PHP 6.19 PHP 215,000 PHP 298,100 18.6%
ICT PHP 41.70 PHP 110.40 PHP 79.38 PHP 215,000 PHP 340,398 26.4%
MBT PHP 49.38 PHP 86.80 PHP 73.36 PHP 215,000 PHP 274,221 13.6%
MPI PHP 3.26 PHP 4.90 PHP 4.42 PHP 215,000 PHP 251,854 8.7%
SM PHP 415.20 PHP 803.50 PHP 652.85 PHP 215,000 PHP 295,614 18.0%
URC PHP 33.80 PHP 187.00 PHP 92.28 PHP 215,000 PHP 601,893 63.6%

* Definition of EFFECTIVE ANNUAL YIELD Annualized interest rate on an investment taking into account the
effects of compounding.

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