Philippines Has Priciest Property Stock on Business Hub Plan

A Philippine cemetery chain’s ambition to create a new business hub for the nation has its stock trading at an eye-popping 100 times book value.

Golden MV Holdings Inc. reached that valuation last month when its thinly traded shares surged to a record high. It’s the most expensive stock on the Bloomberg World Real Estate Index, at a price-to-book ratio more than double that of any other member. The world gauge has a PB ratio of just under 1. 

The share price has surged over 130% in the past year, boosting the wealth of chairman and controlling shareholder Manuel Villar Jr. That’s cemented the former lawmaker’s status as the richest person in the Philippines, with a net worth of $24 billion according to the Bloomberg Billionaires Index.

Going public in 2016 as Golden Haven, the company drew attention by expanding from cemeteries into affordable housing. Now investors are betting on its Villar City, an estate projected to reach ten times the size of New York’s Central Park that’s still in development.

The planned 3,500-hectare plot is bigger than Manila’s Makati and Bonifacio Global City commercial districts combined. The question is whether that potential merits Golden MV’s valuation.

When contacted by Bloomberg News, Golden MV cited the Villar City project as the reason for the keen interest from equity investors. The company is planning to change its name to Villar Land Holdings Corp. as it focuses on the project.

It’s now at a market capitalization of over $26 billion. Last year it became the Philippines’ largest stock, overtaking fellow property firm SM Prime Holdings Inc. By way of comparison, SM Prime trades at around 1.5 times book value.

The stock’s more than 1,000 times trailing 12-month earnings multiple doesn’t seem justified by profits alone, said Toby Allan Arce, an analyst at Globalinks Securities & Stocks Inc. “Its valuation is speculative, resting heavily on projected cash flows from Villar City and similar assets.”

Golden MV has no official analyst ratings or earnings estimates according to data complied by Bloomberg. The free float accounts for less than 12% of its total shares outstanding.

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