Bad timing? DM Wenceslao limps in market debut

Ralf Rivas
Bad timing? DM Wenceslao limps in market debut
Analysts agree that DM Wenceslao is a good company, but in a bad, bearish market

MANILA, Philippines – A company’s initial public offering (IPO) is usually met with  excitement among investors, but the volatile market was not too kind on DM Wenceslao (DMW), the first company to debut in the Philippine Stock Exchange (PSE) in 2018.

DMW’s stock price was set at P12 a piece, 48% lower than its initial plans of P22.90. As of Friday, June 29, DMW closed at P10.26 per share, 14.5% down from its IPO price.

Manny Lisbona, PNB securities president, said in a One News Businessworld live interview that DMW “is a good company, but in a bad market.” (READ: Philippine stocks dive into bear territory)

“Demand was kind of dry for [DM] Wenceslao, much lower than what we have anticipated and experienced in the past,” Lisbona added.

Philippine shares are fighting to stay above the 7,000 level, after briefly flirting with 6,900 last week. The last trading day of June closed with all counters in the green, with the PSE index (PSEii) bouncing back to 7,193.68.

Despite the dip in trade price, DMW CEO Delfin Wenceslao said they are very “confident on the stability and trajectory” of their company.

“We are diversifying our portfolio. We are into office, retail, residential,” Wenceslao told Businessworld live.

They raised P8.15 billion by selling some 679.17 million common shares in the stock market. 

They intend to use P3.7 billion for the construction of 9 real estate projects.

DMW owns one of the largest land holdings in Metro Manila and majority of their assets are located in Aseana City.

DMW has a total leasable area of 59,000 square meters in Aseana City. The company is bullish that it can expand that fourfold within 5 years through the IPO.

Total revenues grew by an average of 35% every year. The company gained P1.6 billion in 2015 and doubled that in 2017. Most of its revenues came from leasing businesses, which grew by 11% on average.

How soon can DMW recover?

PSE president Ramon Monzon said he expects DMW “to be rewarded eventually” since it braved going public amid the market’s bearishness.

“We have two to 3 [companies] in the pipeline. We will have to see how this first one fares out,” Monzon said.

Del Monte Philippines, Incorporated was supposed to be this year’s first IPO, but shelved its plans due to market conditions. (READ: SEC approves planned IPO of Del Monte Philippines) – Rappler.com

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.