Prime Orion Philippines Inc. (POPI) Core Fundamentals

I learned in 2014 that Tutuban Center will soon be expanded into a transport hub in line with the government’s plan to revive the train service that used the shopping complex as its Manila station. That time, POPI said its affiliate, Tutuban Properties Inc. (TPI), signed a memorandum of understanding with the Department of Transportation (DOTr) and the Philippine National Railways (PNR) for the completion of a plan for the North-South Railway Project (NSRP) as approved by the National Economic and Development Authority (NEDA), the NSRP involves the construction of a 37-kilometer elevated commuter railway from Malolos, Bulacan to Tutuban in Manila (called the North Line Phase 1) and a 653-kilomter railway from Tutuban to Legazpi City, Albay (called the South Line Phase 2).    

Under the government’s plan, the North Line and the NSRP Transfer Station will be located at the Tutuban Center, which TPI operates under a lease agreement with PNR. The lease has been extended until 2039. The P117-billion North Line, which will be financed by a loan from Japan, will operate for 35 years, while the P170-billion South Line project will be bid out under the public private partnership (PPP) scheme.   Besides the NSRP, the Tutuban Center will also be one of the receiving stations for the LRT2 West Extension, which will go all the way to the Manila port area and will connect to the NSRP Transfer Station. Once completed, the project is expected to bring in another 400,000 in commuter traffic each day to the Tutuban Center.    

POPI's Landbanks

The company also plans to complete the redevelopment of the 8.5-hectare Tutuban property. POPI also plans to convert a 15-hectare property in Calamba, Laguna into an industrial complex. The property has been serving as warehousing facility for several companies. A similar plan is in store for its 31-hectare property in Sto. Tomas, Batangas. Plans for a one-hectare property in Cebu are underway in line with the provincial government’s master plan for Mandaue’s North Reclamation area. Last year, POPI acquired a 5.8-hectare property in Palawan for a possible venture into tourism beachfront.   

Ayala Land, Inc. (ALI) Acquired 55.2% of POPI stake.

Due to these developments, ALI purchased 5.63 billion at P2.25 per share from both Guoco Assets Phils., Inc. and Genez Investments Corp. or 51.06% stake in POPI on 24 February 2016 and formally took over the firm that hold the lease and development right over a 20-hectare Tutuban Center in Divisoria. 

Recently, the Ayala property developer has cemented its controlling interest in POPI with the purchase of additional shares at P2.45 each from Genez Investments Corp. that boosted its stake to 55.20% from 51.06%.   

Why invested POPI only now?   

While it’s my common knowledge since 2014, I closely monitored these potential core developments of POPI. Though adamant as I want to see how these developments advanced, the progressed of PPP scheme until this very day is not convincing.  Nevertheless, with the Ayalas’ in majority control, I’m convinced and expected a total wipeout of POPI’s deficit since more than a decade ago from its fiscal year 2017 financial results onward.

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DISCLAIMER: I'm not a Certified Financial Planner. Published herein is my personal opinion and should not be construed as a recommendation, an offer, or solicitation for the subscription, purchase, or sale of this security.