Roxas Holdings, Inc. : Fairly valued, but don’t skip the other factors

Roxas Holdings, Inc. relative valuation is now NEUTRAL. It was previously rated UNDERVALUED, and has a fundamental analysis score of 41.

Our analysis is based on comparing Roxas Holdings, Inc. with the following peers – Bogo-Medellin Milling Co., Inc., Roxas & Co., Inc. and Khon Kaen Sugar Industry Public Co. Ltd. NVDR (BMM-PH, RCI-PH and KSL.R-TH).

Relative Valuation

Roxas Holdings, Inc. is currently neutrally valued, as its previous close of PHP 5.08 lies within the CapitalCube estimate range of PHP 4.99 to PHP 5.84. Over the last 52 week period, Roxas Holdings, Inc. has fluctuated between PHP 2.50 and PHP 5.08.

Relative Valuation

Company Overview

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It trades at a lower Price/Book multiple (0.73) than its peer median (1.10).
  • The market expects faster earnings growth from ROX-PH than from its peers and also a turnaround in its current ROE.
  • ROX-PH has relatively low profit margins and median asset efficiency.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • ROX-PH‘s return on assets currently and over the past five years has trailed the peer median and suggests the company might be operationally challenged relative to its peers.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • Compared with the peers chosen, ROX-PH has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • ROX-PH seems too levered to raise additional debt.

Investment Outlook

Roxas Holdings, Inc. has a fundamental score of 41 and has a relative valuation of NEUTRAL.

Roxas Holdings, Inc.’s Fundamental Analysis Score is about average at 41, thus not allowing for a specific classification into the Value – Price Matrix.

Fundamentals Vs Relative Valuation

Quadrant label definitions. Hover to know more

Safety, Value Play, Value Trap, Speculative

Drivers of Valuation

ROX-PH has a Turnaround profile relative to its peers.

The market expects ROX-PH to grow faster than the median of its chosen peers (P/E of 67.25 compared to peer median of 16.43) and to improve its current ROE of 1.16% which is below its peer median of 5.50%. Thus, the market seems to expect a turnaround in ROX-PH‘s current performance.

The company trades at a lower Price/Book multiple of 0.73 compared to its peer median of 1.10.

Valuation Drivers

Quadrant label definitions. Hover to know more

Outperforming, Harvesting, Challenged, Turnaround

ROX-PH has maintained its Turnaround profile from the recent year-end.

ROE % (On Common Equity)
Price To Earnings

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

Roxas Holdings, Inc. produces sugar and ethanol in the Philippines. It operates through the following segments: Central Azucarera Don Pedro, Inc., RHI, Central Azucarera de la Carlota, Inc., Roxol Bioenergy Corp., San Carlos Bioenergy, Inc. and Others. The RHI segment is a diversified holding and investment corporation with specific focus on sugar milling and refining business. The Central Azucarera Don Pedro, Inc. segment is engaged in the business of producing, marketing and selling raw and refined sugar, molasses and other related products or by-products and offers tolling services to traders and planters. The Central Azucarera de la Carlota, Inc. segment produces raw sugar and molasses and trades the same on wholesale & retail basis. The Roxol Bioenergy Corp. segment engage in the business of producing, marketing and selling of bioethanol fuel, both hydrous and anhydrous products from sugarcane and related raw materials. The San Carlos Bioenergy, Inc. segment was acquired to expand the business of producing, marketing and selling bio-ethanol fuel, both hydrous and anhydrous, products from sugar cane and related raw materials, and renewable and alternative energy sources. Others segment pertain mainly to consultancy business, dealer and trader of agricultural products and subsidiaries with no operations yet. The company was founded in 1927 and is headquartered in Makati, Philippines.

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