2025-11-04 14:32Summary of First Pacific Company Conference Call Company Overview - Company: First Pacific Company (SEHK:00142) - Industry: Investment holding company with interests in various sectors including food, telecommunications, utilities, and natural resources - Key Assets: Indofood, Metro Pacific Investments (MPIC), PLDT, PacificLight Power, IndoAgri, Philex Mining Corporation Core Points and Arguments - Investment Strategy: Focus on defensive assets in Southeast Asia, particularly in sectors less affected by economic downturns such as utilities and telecommunications [6][7][8] - Financial Performance: - First half of 2025 showed an 8% increase in recurring profit and an 11% increase in overall profit due to controlled head office costs [10] - Record high earnings reported in the past four years, with the first half of 2025 exceeding the total profit of 2020 [9][10] - Dividend Policy: Progressive dividend policy aimed at increasing per-share distributions annually, contingent on financial performance [10][34] - Market Position: - First Pacific's market cap is approximately $3.5 billion, with a low price-to-earnings ratio of less than five times compared to peers [22] - Significant NAV discount of about 7.4% as of September [27] Key Holdings - Indofood: - Largest maker of wheat-based instant noodles globally, contributing $1.9 billion to First Pacific's asset value [4][13] - Revenue growth from IDR 40 trillion to over IDR 100 trillion over 14 years, with strong EBIT margins around 25% [14][15] - Metro Pacific Investments (MPIC): - Major electricity distributor in the Philippines, owning 48% of Meralco and 93% of Metro Pacific Tollways Corporation [17][18] - Strong earnings growth, with power generation becoming a significant source of income [19] - PLDT: - Largest telecommunications company in the Philippines, providing steady earnings and significant dividends [20] - PacificLight Power: - Operator of LNG power plants in Singapore, contributing to dividend income and future growth with new projects [21] Growth Catalysts - Philex Mining Corporation: New Salangan mine expected to open next year, potentially increasing earnings significantly [23][24] - Maya: Fintech platform with rapid growth, currently the largest consumer fintech app in the Philippines, showing a net interest margin increase from 7% to over 20% [25][26] - MPIC Valuation: Potential for revaluation as the market recognizes the value of its assets, particularly Meralco [28][29] Additional Insights - Geographic Focus: Majority of assets located in the Philippines (over 50%), with significant investments in Indonesia and Singapore [5] - Debt Management: Gross debt of approximately $1.4 billion, with a balanced approach to fixed and floating interest rate borrowings [12] - Market Conditions: Confidence in continued earnings growth supported by economic forecasts for the regions of operation [11][29] Conclusion - First Pacific Company is positioned as a stable investment opportunity with a focus on defensive assets in high-growth markets. The company is confident in its ability to deliver continued earnings growth and shareholder value through its diversified portfolio and strategic investments in key sectors.