ACCORD CAPITAL EQUITIES CORPORATION

COMPANY REPORT: First Philippine Holdings, Inc [pse: FPH]

Outlook: BUY ON DIPS

PRICE (trade date) Price Range (52-wk) PHP PE Ratio (TTM) Dividend Payout (3 yr average) Outstanding Shares % Free Float

595,931,327 common
67.50 [10/22/10] 43.00 – 72.00 1.12 17.13% 55.00%
43,000,000 preferred

COMPANY PROFILE:
The Company, 42.64% owned by PSE-listed Lopez Holdings Corporation [pse: LPZ] – formerly Benpres Holdings Corporation, has invesments and business interests in
power generation, real estate development, manufacturing and construction and other service industries. FPH is but one of the several Lopez owned- or controlled-
companies listed at the PSE. (e.i. ABS, EDC, and FGEN). It retains a 3.937% equity in MER.

RECENT DEVELOPMENT
The Company is fairly liquid, well covered both over the short and long terms.
Leverage is at acceptable levels, even less than its peers in the industry with pre-tax
earnings more than sufficient to cover interest dues. TIE ratio of 1.87x at the end of
last year has risen to 8.9x by the first semester of the current year. Comparatively,
the competition's ratio is at 2.27x and 4.29x, respectively. Asset utilization however
drops to 1.12 from 2.02 at the end of 2009. Profit margins and ROE have exceeded
2006 levels, growing at a 3-yr compound rate of 1.93%, while ROA has rebounded
quite strongly off 2008's 0.53% to 5.72% in end-2009 and 15.23% as of the latest
report date.

The stock is trading at 1.12x TTM earnings and 4.7x 2009 bottomline. Over the last
three years, it has traded at an PE range of 5x to 10x prior year earnings. In the
same period, year-end PE has settled between a low of 3.3x and high of 9.6x. This
puts present PE levels near the bottom of the average range, which, consequently
presents a possible price target of php137, approaching its equity book value as of h1
2010. Again, over the last three years, the stock, at most ended at a Price-to-Book
of only 0.57, positing an initial target of php84.00, leaving a potential 24% upside
from current levels.

The Company's revenue comes mostly from sale of electricity (80%) with
merchandise sales a far second at less than 10 percent. As of h1 2010, both register
PER SHARE DATA
year-on-year growths of 11% and 40%, respectively. This trend is seen to continue 2010 (1h) 2009 2008 2007
through the balance of the year, with year-end sales anticipated to surpass 2006's
php60.5B. Net margins were substantially helped by a huge gain on the sale of BOOK VALUE 147.416 100.763 117.131 147.338
investments in shares of stock in the first quarter.
EARNINGS 43.0800 14.3200 2.0200 7.5900
Despite its fall off the php71.10 top, the accumulation trend has remained valid. Dividend Payout 2.40% 10.81% 8.05% 26.28%
Price weaknesses should open opportunities for a pick-up, particularly as, and if it
approaches support at php63.50. Resistance is seen initially at the php68.50 to PE (based on 5.3x 31.2x 9.5x 8.7x
php71.00 range. Q3 earnings expectations should provide a positive spin. trailing year EPS)
3.3x 8.3x 1.6x 5.5x

INCOME DATA ( in millions PHP)

Year Ended Revenues/ Sales EBIT Net Income NPM %

2010 (1h) 34,256.000 28,192.000 25,671.000 74.94%

2009 58,873.000 12,876.000 8,510.000 14.45%

2008 60,248.000 3,472.000 1,192.000 1.98%

2007 60,517.000 8,454.000 4,475.000 7.39%

BALANCE SHEET DATA ( in millions PHP)

Year Ended Current Ratio Quick Ratio Debt Ratio Debt-to-Equity ROA ROE

2010 (1h) 2.640 2.330 0.380 0.720 15.23% 29.22%

2009 1.410 1.150 0.500 1.250 5.72% 14.21%

2008 0.860 0.630 0.550 1.790 0.53% 1.72%

2007 1.080 0.780 0.510 1.400 1.87% 5.15%

DISCLAIMER: THE MATERIAL CONTAINED IN THIS PUBLICATION IS FOR INFORMATION PURPOSES ONLY. IT IS NOT TO BE REPRODUCED OR COPIED OR
MADE AVAILABLE TO OTHERS. UNDER NO CIRCUMSTANCES IS IT TO BE CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION TO BUY ANY
SECURITY. WHILE THE INFORMATION HEREIN IS FROM SOURCES WE BELIEVE RELIABLE, WE DO NOT REPRESENT THAT IT IS ACCURATE OR COMPLETE
AND IT SHOULD NOT BE RELIED UPON AS SUCH. IN ADDITION, WE SHALL NOT BE RESPONSIBLE FOR AMENDING, CORRECTING OR UPDATING ANY
INFORMATION OR OPINIONS CONTAINED HEREIN. SOME OF THE VIEWS EXPRESSED IN THIS REPORT ARE NOT NECESSARILY OPINIONS OF ACCORD
CAPITAL EQUITIES CORPORATION ON THE CREDIT-WORTHINESS OR INVESTMENT PROFILE OF THE COMPANY OR THE INDUSTRIES MENTIONED.