DoubleDragon (DD) IPO shareholders gain 375% in 1 month

James Ryan Jonas

Is Double Dragon Properties (DD) the new darling of Philippine stock market investors?

This seems to be the case as the stock celebrated its first month of trading with an unprecedented bullish run.

Overwhelming stock price gain

On May 7, exactly one month after it debuted on the Philippine Stock Exchange, Double Dragon (DD)‘s stock price closed at P4.70 per share — a 135% increase from its offer price of P2.00 during DD’s Initial Public Offering (IPO) in April 2014.

Last week, on May 9, the stock surged once more and closed at P6.76 — representing an overwhelming 238% gain from its IPO price.

Still, DD’s price surge seems unabated because on May 15, the stock closed at its all-time high of P9.50 — already a 375% increase from its P2.00 offer price.

If you were able to buy P100,000 worth of DD shares during its IPO offer period, that amount would now have grown to P475,000. Millionaires were surely made because of the DD price run-up.

Are you one of these lucky DD shareholders?

P1 billion income target by 2016

The surge in DoubleDragon’s price in the past days was a direct result of the company’s announcement that it doubled its Net Income in the 1st quarter of the year.

In a disclosure submitted to the Philippine Stock Exchange on May 9, Double Dragon said profits grew 117% to P21.2 million in the first three months of the year from P9.8 million a year ago.

Consolidated revenues, meanwhile, surged 142% to P172.5 million from P71.3 million during the January to March period in 2013.

The company is targeting to generate net income of P1 billion by 2016 and P4.8 billion by 2020. These seem to be lofty goals but perhaps are the same reasons investors are accumulating DD shares.

Branded community mall chains nationwide

Double Dragon Properties is a joint venture between Mang Inasal founder Edgar Injap Sia and Jollibee owner Tony Tan Caktiong. It was the first company that conducted an IPO this year, raising P1.16 billion by offering 26% of its shares to the public.

DD envisions to be one of the largest commercial and residential property developers in the Philippines by 2020. The company plans to develop CityMalls, its brand for community mall chains, nationwide particularly in the Visayas and Mindanao. The first 5 CityMalls are expected to be completed within 2014 while the other 20 are being planned for 2015.

In addition, it is completing several residential and commercial condominium projects in Manila (W.H. Taft Residences), Iloilo (Uptown Place Condominium and Injap Towers) and Laguna (Umbria Commercial Center).

Brokers’ analysis and recommendations

Given these future prospects, do we expect more price run-ups for DD or a price decline in the coming weeks?

No one can accurately predict this, of course. Some traders are saying DD is still to reach its pea, with further opportunities for capital appreciation, while some warn that profit taking is in the offing since prices have risen to all-time highs, leading to a possible price correction.

Regardless, those who got in during the company’s IPO undoubtedly feel ecstati, now that they have doubled or even tripled their investment.

The decision to subscribe to the IPO was consistent with the recommendation of three top stockbrokers in the Philippines whose analyses were mentioned in PinoyInvestor’s Special Report on Double Dragon’s IPO.

On March 26, local stock trading resource PinoyInvestor released a Special Report detailing the opinion and recommendations of stockbrokers Angping Securities, DA Market Securities and Unicapital Securities. An excerpt from Unicapital Securities’ analysis:

At PHP 2.00 per share, Double Dragon will trade at 36.56x Price-Earnings Ratio (PER) 2013, based on a 32% earnings growth to PHP 122.1 million. This is above the industry average of 13.28x. Our Recommendation: Subscribe to the IPO.

If you want to get a copy of the DD IPO analysis, download it in the Premium Members section of PinoyInvestor.

PinoyInvestor offers guidance about the Philippine stock market, prepared not by anonymous bloggers or faceless Facebook posters, but by seven (7) of the Philippines top stock brokers, including:

  1. First Metro Securities
  2. Angping & Associates Securities
  3. AB Capital Securities
  4. Unicapital Securities
  5. DA Market Securities
  6. 2Trade Asia Corp.
  7. Regina Capital Development Corp.

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James Ryan Jonas teaches business management, investments, and entrepreneurship at the University of the Philippines (UP). He is also the Executive Director of UP Provident Fund Inc., managing and investing P3.2 Billion ($56.4 Million) worth of retirement funds on behalf of thousands of UP employees.