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SUNDAY, FEBRUARY 5, 2017
Business
Ray S. Eñano, Editor / Roderick dela Cruz, Issue Editor business@thestandard.com.ph
CHICKEN SELLER TURNS TYCOON
Berjaya Group founder and Malaysian philanthropist Tan Sri Dato Seri Vincent Tan
BERJAYA FOUNDER UNVEILS GK CENTER
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CHICKEN SELLER.
Mang Inasal founder Edgar “Injap” Sia
By Ian Sayson and Clarissa Batino
I
t’s been a fast ascent for college dropout Edgar “Injap” Sia, who less than a decade ago was selling barbecue chicken in the Philippines. He now leads the real estate developer with the best stock gains in Asia.
His company, DoubleDragon Properties Corp., went public in the Philippines in 2014 and has surged 2,500 percent since it began trading in April that year through Jan. 31, beating 460 other Asian developers worth at least $500 million. That surge has inflated DoubleDragon’s market value to 115.1 billion pesos ($2.3 billion), propelling it to the nation’s top five developers even though it owns and manages a fraction of the real estate held by its rivals. Sia was studying architecture when he dropped out at 19 to start a business venture with classmates. Now 40, Sia ranks among the youngest tycoons in the Philippines. In 2003, he started a chicken shop in Iloilo City before turning it into a nationwide chain that overtook McDonald’s Corp. in store count in 2010. That year, he sold his Mang Inasal chicken chain to Jollibee Foods Corp., and later partnered with its founder Tony Tan Caktiong and with SM Investments Corp., owner of the nation’s largest retailer, to venture into property and malls. With the same lofty ambitions he used to expand his chicken empire, Sia aims to operate 100 CityMall outlets by 2020 to help meet the basic needs of shoppers in smaller provinces. DoubleDragon is a minnow among Asian devel-
opers -- it had $844.5 million of assets in the third quarter of 2016, about 0.6 percent of the assets of Asia’s largest real estate company, China Evergrande Group. “The stock has outperformed because many investors believe in its business model, which is geared towards addressing geographical gaps in retail,” said Cristina Ulang, head of research at Manila-based First Metro Investment Corp. “DoubleDragon is very focused on penetrating smaller cities that are growth areas of the future. It’s already positioned ahead of the others when growth filters into these smaller cities. ” Since DoubleDragon’s 2014 initial public offering, the only developers worldwide to beat its gain have been a Venezuelan real estate investment trust and a U.S.-listed Chinese provider of real estate services. The stock surge inflated DoubleDragon’s market value to a record in June that then made it the third-most valuable Philippine builder, dislodging Megaworld Corp., the largest landlord for call centers. While DoubleDragon shares are down 26 percent from their all-time high, the stock may rebound to a new record if the company delivers on mall roll-out and earnings growth pledges, Ulang said. The stock rose as much as 5.6
percent to a three-month high, outpacing a 0.2 percent gain in the benchmark Philippine Stock Exchange Index.
Fundraising
Sia is also raising long-term funds to buy and develop property. The builder has raised 30.7 billion pesos from the sale of bonds and preferred shares in the past three years, augmenting the 1.1 billion peso proceeds from its IPO. The amount is 75 percent of its 40.4 billion peso budget to build a million square meters of malls and offices for lease by 2020. Sia said another 9.7 billion pesos of retail bonds will be sold this year to complete the budget, which also includes the expansion of two hotel brands. DoubleDragon will post a sevenfold gain in recurring revenue to 9.43 billion pesos by 2020 from about 1.35 billion pesos this year as most of its leaseable portfolio start to contribute from 2018 onward, Sia said. “We have already passed the toughest phase in bridging DoubleDragon’s transition into a business with sustainable recurring revenue,” Sia said in an interview on Jan. 26. “Our leasing revenue has kicked in and will start to surge as we focus on execution.” Sia said the company is on track to meet targets he has set, including a billion peso profit in 2016, completing the construction of 50 malls this year and operating at least 50 outlets in 2018.
Operational concerns
“Investors bought the stock on what the company would or could do, not on what it had. But I’d be cautious because of operational concerns,” said Rens Cruz, an analyst at Regina Capital Development Corp.
who has a hold rating on the stock. The company is “still in a transition phase from one that gets revenue from interim project to one that gets earnings from leasing.” DoubleDragon planned its CityMall complexes to have a uniform format -- one level of no more than one hectare (2.5 acres) each, with only one tenant per retail category that includes banking, grocery, pharmaceutical, food and entertainment. It’s meant to provide the basic needs of community dwellers in smaller provincial cities that may not be readily attractive to bigger developers like SM Prime Holdings Inc. and Robinsons Land Corp., Sia said. DoubleDragon builds most of its malls in cities with populations of 100,000 to 150,000, which he said comprise about 80 percent of the nation’s 145 cities. He expects the bigger retailers’ interest in these smaller communities will only rise as sales growth slows in larger and more populated areas due to saturation and competition. Jollibee, which has more than five restaurant brands, and SM Investments, a partner in DoubleDragon’s shopping mall unit CityMall Commercial Centers Inc., are anticipating the trend. The two groups typically lease two-thirds of a CityMall outlet, Sia said. “When we opened Mang Inasal in 2003, we promised 100 stores in five years, and we opened our 100th outlet four years and a month later,” Sia said. “These smaller provincial cities, starting in the next two to three years, will be the most important areas for modern retail. Once you spot a gap that big players missed or nobody has paid attention to in a transition, you will own that space for many decades.” Bloomberg
THE legacy of caring continues to sow hope and transformation, as various groups with a common cause unite in making an ìnclusive world a reality for all at the recent Social Business Summit 2017 by Gawad Kalinga. Joining the global action to end poverty through sustainable community-building is Berjaya Group founder and Malaysian philanthropist Tan Sri Dato Seri Vincent Tan, who came back to the Philippines to fulfill yet another commitment to the noble GK cause. Tan Sri flew in the country to lead the unveiling of the Berjaya Garden Restaurant and Culinary Center, a training facility that supports the GK Enchanted Farm’s role as an incubator-hub for the country’s growing social entrepreneurship. Located in the GK Enchanted Farm in Angat, Bulacan, the BGRCC is envisioned as one of the vital cornerstones of learning inside the farm—touted as the ‘first farm village university in Asia’--as it serves as the primary food center of the farm, catering to the 200,000 partners, entrepreneurs and students who visit the GK Enchanted Farm annually. The food served in the restaurant is locally produced, sourced and processed, providing livelihood for local farmers. BGRCC is also a school-within-community where students and social entrepreneurs can develop their culinary skills and products. Joining Tan Sri at the landmark opening are GK Founder Tony Meloto, Berjaya Philippines country head Paul Soo, GK executive director Luis OquiÒena, Sen. Bam Aquino, Berjaya Philippines executive director Tan Eng Hwa, GK Enchanted Farm COO Shanon Khadka and Tan Sri’s children Morvin and Chryseis Tan. The milestone marked the Malaysian conglomerate’s steady support for the GK mission. The Berjaya-GK collaboration started in 2012 when Tan Sri, through Berjaya Philippines Inc., pledged to contribute P300 million over three years to GK for the construction of houses for Filipinos affected by typhoon Sendong and other natural calamities, as well as for poverty-stricken families across the Philippines. To date, Berjaya has successfully helped build 820 GK houses in 14 provinces.
VIVO V5 PLUS SEEN DOMINATING SELFIE-LOVING PH VIVO V5 Plus, the flagship model of premium global brand Vivo, is expected to dominate the local market for selfie-centric smartphones. Dubbed as the perfect selfie phone, the Vivo V5 Plus is seen winning the hearts of a nation of selfie-lovers, with the Philippines now known as a certified selfie hot-spot and with Filipinos putting a premium on selfie-friendly camera features when purchasing smartphones. Vivo V5 Plus features the most advanced selfie technology to date, which includes a dual 20-megapixel front camera, a true bokeh effect—the aesthetic blur or outof-focus impression of a photo—on the
spot, without editing; a selfie soft light; and a face beauty mode 6.0. Globally, Vivo has been known for its competitive premium-range offerings, becoming the top five global smartphone vendor for the third quarter of 2016, a spot it has held for four consecutive quarters now. This is according to data from the International Data Corp.’s worldwide quarterly mobile phone tracker, which provides detailed and timely information on total mobile phone and smartphone markets across the globe. According to the market-research firm IDC, the worldwide smartphone market grew 1.1 percent year over year for the third quarter
of 2016, with 363.2 million shipments. Of these shipments, global smartphone brand Vivo shipped a record 21.2 million smartphones, giving the brand a 5.9-percent share in the smartphone market. The continued upward trajectory of Vivo is attributed to a growing following in China and India, the world’s two biggest smartphone markets, and to a significant growth in Myanmar. The remarkable growth is also recorded as Vivo expands to different markets in Southeast Asia. Known for its competitive premiumrange offerings, the top five premium global brand is also poised to develop one of its biggest markets here in the
Philippines. Vivo is largely known for its first-tomarket innovations such as the Vivo X1, one of the slimmest phones in 2012, and the world’s first smartphone to feature a digital-to-analog converter Hi-Fi chip, and the Vivo X3 in 2013, the first smartphone in the world with a 2K resolution display. Now, the global manufacturer has produced the Vivo V5 Plus, the world’s first smartphone to have a dual 20-megapixel front camera. Aside from its front-facing dual cameras, the Vivo V5 Plus also has a 16-megapixel rear camera that captures candid moments beautifully.
Vivo V5 Plus perfect selfie phone comes with the most advanced selfie technology to date, inclusive of features like selfie soft light, bokeh mode and face beauty mode 6.0.