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BDO Unibank Inc (BDOUF) Extended Graph Analysis

January 23rd, 2020 Posted by Extended Analysis No Comment yet

Company Profile

BDO

BDO Unibank Inc (BDOUF) is a Philippine Banking Company  and, the largest in the Philippines in terms of assets, loans and deposits. Moreover, the bank is the 15th largest in SouthEast Asia. It was founded on January 2, 1968 in Manila and headquartered in Makati. Its key areas are the Philippines, Asia, Europe, Middle East and North America. BDO Unibank is registered under the Philippine Stock Exchange (PSE) with ticker symbol BDOUF.

As a full service universal bank, it caters banking services including foreign exchange, brokerage, trust and investment and credit cards, corporate cash management and remittances. 

 

BDO Unibank Inc (BDOUF) Extended Graph Analysis

1. BDOUF CASH FLOW

BDOUF CASH FLOWS

2014 2015 2016 2017 2018 2019
Net cash flow provided by operating activities -33,605,000,000 -12,928,000,000 37,249,000,000 -2,819,000,000 90,312,000,000 23,730,000,000
Net cash used for investing activities -490,000,000 -10,211,000,000 -30,318,000,000 -67,731,000,000 -56,740,000,000 -63,597,000,000
Net cash provided by (used for) financing activities 5,220,000,000 -10,837,000,000 -1,545,000,000 83,983,000,000 2,399,000,000 19,726,000,000
Capital expenditure -5,970,000,000 -6,963,000,000 -5,537,000,000 -6,158,000,000 -8,135,000,000 -4,060,000,000
Free cash flow -39,575,000,000 -19,891,000,000 31,712,000,000 -8,977,000,000 82,177,000,000 19,670,000,000

Facts:

  • Net cash flow provided by operating activities is Php 23.730 billion.
  • Net cash used for investing activities is -Php 63.597 billion.
  • Net cash provided by (used for) financing activities is Php 19.726 billion.
  • Capital expenditure is -Php 4.060 billion.
  • Free cash flow is Php 19.670 billion.

Explanation

  • Cash from operation increased by more than 3,000 percent at Php 87 billion in 2018, however showed a decreased of 74 percent at Php 67 billion in the trailing twelve months.
  • Cash used for investing activities were investment in property, plant and equipment; and purchases of investments.
  • Cash provided by (used for) financing activities were debt issued and repayments plus dividends payments.
  • Capital expenditure is investment in property, plant and equipment.
  • Free cash flow had a growth of 150 percent in five years.

Interpretation

The net change in cash was Php 36 billion in 2018 and -Php 20 billion in the trailing twelve months. In other words, cash at the beginning was higher than the cash at the end in the trailing twelve months.

2. BDOUF BALANCE SHEET

BDOUF BALANCE SHEET

2014 2015 2016 2017 2018 2019
Total cash 41,342,000,000 42,729,000,000 40,909,000,000 45,006,000,000 53,749,000,000 53,749,000,000
Total assets 179,669,000,000 199,613,000,000 217,535,000,000 298,340,000,000 328,149,000,000 364,036,000,000
Total liabilities 633,000,000 623,000,000 743,000,000 852,000,000 777,000,000 1,684,000,000
Equity 179,036,000,000 198,990,000,000 216,792,000,000 297,488,000,000 327,372,000,000 362,352,000,000
Retained earnings 70,242,000,000 88,118,000,000 109,216,000,000 133,529,000,000 156,327,000,000 156,327,000,000

Facts:

  • Total cash was Php 54 billion in 2018 and in 2019 trailing twelve months respectively.
  • Total assets were Php 328 and Php 364 billion in 2018 and the trailing twelve months respectively.
  • Total liabilities were Php 777 million and Php 1.684 billion in 2018 and the trailing twelve months respectively.
  • Equity was Php 327 and Php 362 billion in 2018 and the trailing twelve months respectively.
  • Retained earnings were Php 156 billion in 2018 and the trailing twelve months.

Explanation

  • Total cash represents 15 percent of the total assets in 2018 and 2019 trailing twelve months.
  • Total assets have grown 103 percent in 5 years.
  • Total liabilities increased by 117 percent from 2018 to the trailing twelve months.
  • Total liabilities is less than half percent or 0.46 percent of the total liabilities and shareholders equity.
  • Equity has grown by 102 percent in five years.
  • Equity is 99.5 percent of the total liabilities and shareholders equity.
  • Retained earnings have grown 123 percent in five years.
  • Retained earnings represents 43 percent of equity in the trailing twelve months.

Interpretation

BDO has a strong balance sheet. The company is using investor’s investment more than creditors in its business operation. The shareholders have more stake in the business.

3. BDOUF INCOME AND MARKET

BDOUF INCOME AND MARKET

2014 2015 2016 2017 2018 2019
Revenue 76,498,000,000 84,414,000,000 101,087,000,000 116,087,000,000 133,102,000,000 158,433,000,000
EBIT 31,576,000,000 33,134,000,000 36,704,000,000 43,769,000,000 49,417,000,000 60,639,000,000
Net Income 22,805,000,000 25,016,000,000 26,090,000,000 28,070,000,000 32,708,000,000 43,297,000,000
Market Capitalization 8,780,000,000 8,157,000,000 8,249,000,000 14,373,000,000 10,890,000,000 13,627,000,000
Intrinsic Value 29,973,663,795 31,891,119,154 32,652,745,225 48,480,991,154 53,494,073,808 47,668,058,944

Facts:

  • The total revenue was Php 158 billion in the trailing twelve months.
  • EBIT was Php 61 billion in the trailing twelve months.
  • Net income was Php 43 billion in the trailing twelve months.
  • The market capitalization was Php 13.6 billion in the trailing twelve months.
  • The intrinsic value was Php 47.668 billion in the trailing twelve months.

Explanation

  • Revenue has grown 107 percent in five years.
  • Revenue growth year-over-year is increasing from 2014 to the trailing twelve months.
  • EBIT has grown 92 percent in five years.
  • EBIT represents 38 percent of the revenue in the trailing twelve months.
  • Net income has grown 90 percent in five years.
  • Net income represents 27 percent of the total revenue in the trailing twelve months.
  • Net income year-over-year growth was 16.52 percent in 2018.
  • Market capitalization had increased 55 percent from 2014 to the trailing twelve months 2019.The value was increasing year-over-year.
  • The intrinsic value has grown 59 percent in five years and it is increasing year-over-year from 2014 to 2018.
  • Intrinsic value was greater by 250 percent against market capitalization in the trailing twelve months.

Interpretation

The company is profitable. The record shows that from revenue down to the bottomline, the management is efficient in generating sufficient income for its business operation.There was no record of negative earnings in the last five years.

4. BDOUF FINANCIAL RATIOS

BDOUF FINANCIAL RATIOS

2014 2015 2016 2017 2018 2019
Asset turnover (average) 0.04 0.04 0.05 0.05 0.05 0.05
Return on assets % 1.27 1.27 1.18 1.11 1.14 1.43
Return on equity % 13.52 13.42 12.70 11.00 10.53 12.86
Debt/Equity 0.63 0.56 0.52 0.48 0.48 0.50

Facts:

  • Asset turnover was averaging 0.05 in the trailing twelve months.
  • Return on assets was 1.43 percent in the trailing twelve months.
  • Return on equity was 12.86 percent in the trailing twelve months.
  • Debt/Equity was 0.50 in the trailing twelve months.

Explanation

  • Asset turnover indicates that the company is making 50 centavos of sales for every one Peso invested in assets.
  • Return on assets indicates that the company produced Php 1.43 of net income utilizing its investment in assets.
  • Return on equity means that for every Peso in common shareholders equity, the company generated 13 centavos of profit.
  • Debt to equity indicates that the assets of the company are funded 2 is to 1 by shareholders to creditors. In other terms shareholders own 66.6 centavos for every Peso of company assets while creditors own 33.3 centavos for every Peso.

Interpretation

The financial ratios of the company shows that the management is performing well in the operation of its business.

5. BDOUF KEY EXECUTIVES

Name Title
Teresita T. Sy-Coson President and CEO
Edmundo L. Tan Corporate Secretary
Sabino E. Acut Jr. Assistant Corporate Secretary
Albin C. Go Head – Legal
Daimacio D. Martin Treasurer
Marilyn K. Go Deputy Treasurer
Estrelita V. Ong Chief Internal Auditor
Federico P. Tancongco Chief Compliance Officer
Evelyn L. Villanueva Chief Risk Officer

Facts:

  • Teresita T. Sy-Coson – President and Chief Executive Officer
  • Edmundo L. Tan – Corporate Secretary
  • Sabino E. Acut Jr. – Assistant Corporate Secretary
  • Albin C. Go – Head – Legal
  • Damacio D. Martin – Treasurer
  • Marilyn K. Go – Deputy Treasurer
  • Estrelita V. Ong – Chief Internal Auditor
  • Federico P. Tancongco – Chief Compliance Officer
  • Evelyn L. Villanueva – Chief Risk Officer

Explanation

Hence, the operation of the business is considered productive in the last five years the key executive team has the capabilities and talented in managing its business operations very well. 

6. LOBBYING AND CONTRIBUTIONS

NO POLITICIANS OR LOBBYIST FOUND IN OPENSECRET.ORG AND IN OTHER SOURCES

 

7. BDOUF FINANCIAL STRENGTH

BDOUF FINANCIAL STRENGTH

DATA

Working capital 0
Total assets 364,036,000,000
Sales 158,433,000,000
EBIT 60,639,000,000
Market value of equity 13,627,000,000
Book value of total liabilities 1,684,000,000
Retained earnings 7,031,035,092

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.00 1.20 0.00
B – Retained Earnings / Total Assets 0.02 1.40 0.03
C – EBIT / Total Assets 0.17 3.30 0.55
D – Market Value of Equity / Book Value of Total Liabilities 8.09 0.60 4.86
E – Sales / Total Assets 0.44 1.0 0.44
Z-Score     5.87

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

BDOUF has a Z-Score of 5.87. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.

OVERVIEW

The financials show that the balance sheet is stable and strong.The company is profitable and the management is efficient in producing sufficient revenue for the operation of the business. Moreover, the earnings per share growth was erratic in movement from 2010 to the current date 2019, however, its year-over-year growth was 43.16 percent in the trailing twelve months. 

Overall, the stock of BDO Unibank Inc was currently undervalued from the day this article was published, and the stock is a good opportunity for a Buy.

 

CITATION

https://www.bdo.com.ph/sites/default/files/pdf/BDO%20Unibank%202018%20Annual%20Report.pdf

https://www.bdo.com.ph/company-disclosures/sec-filings

Researched and written by Criselda

 

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