Stock: SMPH PM
Price: P8.40
Valuation (RNAV) P10.75
12mth price target: P9.50
Recommendation: Outperform

Event
SM Prime yesterday opened its largest shopping mall to the public. SM Mall of Asia totals 386,000sqm in gross floor area (GFA), which brings total malls of SMPH to 25 and its total mall portfolio to nearly 3.3m sqm GFA. It is the centerpiece of ths SM Central Business Park which covers 60 hectares.

Impact
The opening yesterday was warmly received by the shopping public, with over 500,000 coming to the initial day based on company estimates. This qualifies it as a great success even against the high standards of most SMPH shopping mall openings. 
The shopping mall has achieved an occupancy level of 80% as of the initial day of opening, which also includes a lease-awarded rate of 94%. This indicates very high occupancy levels, which would be much higher than SM Prime has historically achieved for its larger shopping malls of over 100,000sqm GFA. Note that only smaller shopping malls of around 60,000sqm that were recently built by SMPH can come close to these occupancy levels. 
It would appear that SM Prime’s decision to delay the opening from the previous March schedule has paid off. The occupancy rate level would make the Mall of Asia virtually fully operational. 
A key attraction of Mall of Asia is its close proximity to both the international airport and Manila Bay, making it a good tourist destination. This would provide a good complement to SMPH’s core shopping clientele which covers a broad range of the population in terms of income levels.

Action and recommendation

• The development puts to rest some investor concerns of another delay in the opening, or an unsuccessful opening day.
• This reinforces our Outperform rating on SM Prime, which offers attractive valuations along with a good dividend yield.