Stock brokerage firm ATR-Kin-Eng Securities has raised its 2007 net profit target for SM Prime Holdings Inc. by three percent to P6.59 billion, mainly due to stronger cash flows from new malls.

The SM Group has been aggressively expanding its mall operations to further boost its profitability and to capitalize on the robust remittances from overseas Filipino workers.

‘Going forward, Mall of Asia and SM Prime’s other malls should provide a significantly larger cash flow base, something we already seeing. From negative free cash of P6 billion last year due to the construction of the Mall of Asia and other malls we estimate SM will bring in P4 billion and P5.95 billion in free cash flows in 2006 and 2007 respectively, due to opening of the new malls and lower capital expenditures,’ ATR-Kim Eng saind in a note to clients.

‘Contrary to opinions that the country has too many malls, our observations over the past few months suggest there are still major areas in Metro Manila that remain to be exploited, while many major urban cities outside Metro Manila are untouched by major shopping mall operators,’ it added.

SM currently has 26 malls with the latest mall; SM Supercenter Pasig, opened last July 26. The company is scheduled to open SM City Lipa on Sept 22, bringing to 27 the total number of malls by the end of 2006 with a gross floor area of 3.6 million square meters.

Bullish on the property sector, SM Prime expects its net profit to grow by 6.6 percent this year to P5.4 billion compared with P4.97 billion in 2005.

In the first six months of the year, SM Prime posted a net income of P2.6 billion or eight percent higher than the P2.4 billion reported the previous year-period.

SM Prime expects the Mall of Asia, the Philippines’ biggest shopping mall to date to account two percent of total income this year but the figure is expected to increase to 10 percent in the long-term.

SM Prime is a member of listed investment holding company SM Investments Corp., a conglomerate with interest in the property development, retail, sale, wholesale and merchandising, banking and financial services,leisure and tourism and real estate sectors.