Valued 328PE, MM had to go down further to be at par with ALLDY’s 16PE

MerryMart Consumer (MM) and AllDay Supermarket (ALLDY) are the two new supermarket and retail business players that recently raised capital from the public stock market.  In their IPO, they envisioned delivering a world-class grocery experience to Filipinos.  With the capital raised from the public, they vowed to revolutionize the supermarket business and retailing.

Legendary business people own both supermarket companies, Injap Sia of Mang Inasal and DoubleDragon for MM and Manny Villar of Vista Land/Camella and Golden Haven for ALLDY.

Injap Sia’s MM in the first quarter of 2022 earned 12.4 million versus Manny Villar’s ALLDY’s loss of 75.6 million.  ALLDY suffered losses from fire damage turning its bottom-line red.

MM had a profit margin of 17.6% in Q1 2022, while ALLDY’s was at 20.3%. MM burned 42.2 million cash on operating activities in Q1 2022, while ALLDY generated cash flows from operating activities of 263.4 million.

MM in Q1 2022 had to rely on previous bank borrowings to fund its operating activities, expansion, and payment of debts to preserve its cash balance. In comparison, ALLDY was able to fund capital expenditures for expansion through the cash flows generated from operations.  ALLDY had to borrow only to repay borrowed money.

But despite ALLDY registering better results, MM is valued much better by the public.  MM is valued at 328.39 P/E.  ALLDY, meanwhile, is valued only at 15.73 P/E.  MM had to go down further to be at par with ALLDY’s P/E, or ALLDY had to go much up to be at par with MM’s valuation.

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