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Thursday, February 23, 2012

How much is George SK Ty of Metrobank worth?

By TONY LOPEZ

FINALLY, there will be a way to measure the wealth of taipan George Siao Kian (SK) Ty, 79.

The venerable taipan is the founder of Metrobank, the Philippines’ largest bank in equity and according to Euromoney magazine the best bank in 2010 and 2011. Ty’s group is the biggest seller of cars (Toyota) and an emerging powerhouse in property, energy and life insurance.

Ty’s holding company, GT Capital Holdings, Inc. is selling shares to the public.

Its preliminary prospectus filed with the Securities and Exchange Commission describes GT Capital as “a major Philippine conglomerate with interests in market leading businesses across banking, real estate development, power generation, automotive, and life insurance.”

GT Capital is selling 41.217 million shares – 33 million in new common shares and 8.217 million in existing common shares. Offering price is “up to P520 per offer share” or up to P21.43 billion (41.217 million shares times P520 per share).

Based on authorized common shares of 500 million, the 41.27 million shares represent 8.2 percent. Based on common shares outstanding before the offer, of 125 million, the 41.27 million represent 33 percent.

Therefore, if P21.27 billion is 8.2 percent, GT Capital is worth P259.39 billion. If P21.43 billion is 33 percent, GT Capital is worth P64.93 billion.

Since GT Capital is almost 100 percent owned or controlled by George Ty thru his various family corporations, he is thus worth between P65 billion and P259 billion.

At P42.50 per dollar, P65 billion is $1.53 billion; P259 billion is $6.1 billion. Thus, George Ty is worth between $1.5 billion and $6 billion, making him among the country’s three richest individuals.

In June 2011, Forbes magazine ranked Ty only tenth richest, with a net worth of $1.1 billion, far behind No. 1 Henry Sy with $7.2 billion, No. 2 Lucio Tan with $2.8 billion, No. 3 John Gokongwei Jr. $2.4 billion, and No. 4 Andrew Tan with $2 billion net worth.

Ty’s flagship Metrobank financial house has a market capitalization of P179 billion. His family owns 51 percent of Metrobank, equivalent to a market cap of P91.29 billion ($2.148 billion).

In its preliminary IPO filing with the SEC, GT Capital reported a net income of P3,285.7 million (P3.28 billion) for 2010, the latest year for which it is reporting an income. Divide the P3.285 billion by 125 million shares outstanding and you get earnings per share (EPS) of P26.28 per share.

Divide the P520 proposed offering price by P26.28 EPS, and you get a PE ratio of 19.78 times earnings. Metrobank, by the way, is also selling at 20 times 2010 earnings.

Metrobank is a single play stock – just banking. GT Capital is a multi-play stock – banking, property, automotive, energy, and life insurance. GT is an application of the time-honored adage in investment – don’t put your eggs in just one basket.

GT Capital owns 25.1 percent of Metrobank, 80 percent of Federal Land, 21 percent of Toyota Motor Philippines, 25.3 percent of Philippine AXA Life, and about 45 percent of Global Business Power, the group’s power generation company.

Metrobank is a 50-year-old bank. It is the largest commercial bank in terms of capital (P109 billion) and ROPOA (real and other properties acquired, P15 billion as of end-June 2011), and No. 2 in resources (P958.38 billion, about P142 billion less than assets of No. 1 BDO, P1.1 trillion).

Federal Land, Inc. is the 40-year-old property arm of Metrobank. It has undertaken over 35 projects covering more than 50 million hectares, starting in Binondo with Tytana Plaza, then to Bayview in Roxas Blvd, and now Bay Garden on Roxas Blvd. and Macapagal Avenue where it is developing 35 hectares, including the present site of the Toyota showroom.

Federal has 20 ongoing projects, including the Park West Tower at the Fort, the Grand Midori and Oriental Garden in Makati, the Capital Tower in Quezon City, the Tropicana in Marikina, and the biggest, the 66-story Grand Hyatt on ten hectares of land in Taguig.

Federal made P2.5 billion in revenues and P600 million in profits in 2011.

Toyota Motor Philippines is the country’s most profitable and largest auto maker (P17.9 billion in assets in 2010) and seller with close to 34 percent of the local auto maker. TMP has won the Triple Crown for an unprecedented ten years—for being consistently No. 1 in each auto market segment—passenger cars, commercial vehicles, and overall sales.

In 2010, TMP hauled in a net income of P3.11 billion, up a robust 80.39 percent from P1.724 billion profits in 2009, on revenues of P58.537 billion, up 27 percent from P46.05 billion in 2009. Return on sales was 5.31 percent in 2010, up from 3.74 percent in 2009. The record 2010 P3.11 billion net income yields a 43.9 percent return on average equity of P7.07 billion.

Toyota Motor is also the first to introduce the first full hybrid luxury vehicles in the Philippines (now at much reduced prices) and has the highest mark in the JD Power Customer Satisfaction Index.

Metrobank claims Philippine AXA Life was already the leading variable insurance provider in the country in terms of first year premium income and was third in the industry, based on total premiums, with 30 percent market share, over 250,000 customers and over P30 billion in assets under management.

In 2010, Philippine AXA Life registered premium income growth of 88.6 percent to P8.3 billion from P4.4 billion in 2009.

George Ty has bought stakes in power generation. His Global Business Power has installed capacity of 627 megawatts – 619.5 MW fed to the Visayas region and 7.5 MW to Mindoro. GBP is now one of the largest power producers in the Visayas with investments of over $900 million.

With electricity either in short supply or high priced or both, power is a no-brainer profit maker.

Bna.biznewsasia@gmail.com

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