We continue to be optimistic about the growth of SM Investments Corporation (SMIC) given its net income growth of 9% year-on-year (YoY) in Q3 2024.  Credit quality remains strong given its net debt to equity ratio of 53.84% along with its dominant market position in multiple sectors.

We continue to be optimistic about the growth of SM Investments Corporation (SMIC) given its net income growth of 9% YoY at Q3 2024. Its exposure to different industries offers extensive synergies and allows the company to maintain a dominant market share in the retail and banking sector. Credit quality remains strong given its net debt-to-equity ratio of 53.84% (Q3 2024).

• 65% of SM Investments’ revenues come from its retail segment. Any slowdown in consumer spending in the Philippines might negatively affect its earnings.
• There is a potential for growth in areas outside the National Capital Region (NCR) given that it is targeting to open up new malls outside Metro Manila. By 2028, it plans to have 14 new malls, most of which would be built outside NCR.
• Given the recent Reserve Requirement Ratio (RRR) cut and rate cuts by the Bangko Sentral ng Pilipinas (BSP), BDO is expected to expand its net interest margin, which would be credit-positive for SMIC.