Megawide Construction Corp. is the first company to go public this 2011. Just in case you're not familiar with what this company is, Megawide is one of the biggest and fastest growing engineering and construction firms in the Philippines today. Megawide accounts for 70% of the residential condominium projects of the Sy family's SMDC. Other than SM's projects, Megawide's clients include Belle Corporation, Antel Group, Suyen Corp. (owner of Bench), Prince Jun Development Group, Bellevue Hotel Group, Keppelland Realty, Malate Bayview Development Group, and Goldland Properties and Dynamic Realty.
In it's move to go public, Megawide opened 34% of its company's total stock to the public. In it's opening day, Megawide (listed as MWIDE in PSE) offered P7.84 per share.
Being it's top client, Henry Sy's SM bought 64% of MWIDE's total shares leaving only 36% left for public consumption. SM is having several construction plans for 2011 all over the Philippines which means more projects for Megawide. Never mind Sy and SM owning part of Megawide to cut costs in their projects, Megawide is going to have a very busy year and that's all that matters.
Rumors also has it that SMC plans to buy into MWIDE. SMC's diversification plans fits well with MWIDE as SMC is planning to get into PPP (public private partnerships) this year. Should SMC get into MWIDE sooner or later, that would further boost MWIDE up. SMDC and SMC are strong enough to lift MWIDE up. Aside from SMC, Phinma and Ben Chan of Bench are also rumored to take part of MWIDE.
Lastly, there are 11 PPP reported to start this year for a rough total of $200 billion. Being one of the biggest construction and engineering firms, expect Megawide to get into the negotiation and contract talks in at least one of these 11 projects.
Megawide was established in 1997 by De La Salle University civil engineers Michael Cosiquien and Edgar Saavedra and became a P2 billion company since then and accounts for 20% of high rise residential property construction business. Turnover is expected to double to P4 billion this year.
My personal note is that I think that MWIDE is still undervalued considering that SM bought more than half of it's shares. If SMC would push through in acquiring shares and with their PPP plans, MWIDE could be worth a lot more than its IPO price.
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