Megaworld Corporation is the Philippines’s top residential condo developer by unit sales, and supplies mainly mid-range high-rise blocks. The company has built a wide range of mixed-use real estate developments in Metro Manila. It is also the largest office leasing company for BPO locations. Learn more at: http://becomeabetterinvestor.net/blog/riding-the-real-estate-wave-of-business-process-outsourcing/

1. Presented by: Dr. Andrew Stotz, CFA
Megaworld
Corporation

2. 222 September 2016
 About three-quarters of MEG’s revenues come from real estate sales, 21% from office
leasing, and the remainder are derived from commercial real estate, hotel operations and
other areas
 Its real estate sales have been mainly mid-range high-rise residential blocks in Metro
Manila and planned community townships in and around the Philippine capital. These
mixed-use developments combine residential units with leased offices for Business Process
Outsourcing (BPO). One of the latest and biggest of such developments is planned for
Bonifacio Global City, a fast-growing central business district alternative
 Although office and retail rents are only 21% of revenue, these divisions contribute
around 45% of net profit, and are helping to make the company’s business less cyclical
 MEG has a business model that aims to accommodate all the real estate needs of the
township population, where it aims to build BPO office buildings, condos for workers to live
in and commercial buildings to cater to residents’ shopping requirements
80
90
100
110
120
130
140
2
3
4
5
6
7
Sep-13 Jun-14 Mar-15 Dec-15 Sep-16
MEG PM (LHS)
Price relative to local index
(PHP) (%)
Sources: A. Stotz Investment Research, company data, Thomson Reuters
Revenue breakdown, by segment 2015
Megaworld Corporation (MEG PM)
Stock information:
Name: Megaworld Corp.
Ticker: MEG PM
Price (PHP): 4.60
Mcap: US$3,097m
3MADTO: US$5m
Beta: 0.9x
Sector: Financials
Industry: Real Estate
Major shareholders:
64% Alliance Global Group,
Inc.
2% Megaworld Corp.
34% Free float
Background: Megaworld Corporation is the Philippines’s top
residential condo developer by unit sales, and supplies mainly mid-
range high-rise blocks. It is also the largest office leasing company for
BPO locations. The company has built a wide range of mixed-use real
estate developments in Metro Manila.
Real estate sales 76% Office and retail rentals 21% Hotel operations and others 3%

3. 322 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Background: Megaworld Corporation is the Philippines’s
top residential condo developer by unit sales, and
supplies mainly mid-range high-rise blocks.
It is also the largest office leasing company for BPO
locations.
The company has built a wide range of mixed-use real
estate developments in Metro Manila.
Megaworld Corporation (MEG PM)

4. 422 September 2016
80
90
100
110
120
130
140
2
3
4
5
6
7
Sep-13 Jun-14 Mar-15 Dec-15 Sep-16
MEG PM (LHS)
Price relative to local index
(PHP) (%)Stock information:
Name: Megaworld Corp.
Ticker: MEG PM
Price (PHP): 4.60
Mcap: US$3,097m
3MADTO: US$5m
Beta: 0.9x
Sector: Financials
Industry: Real Estate
Major shareholders:
64% Alliance Global Group,
Inc.
2% Megaworld Corp.
34% Free float
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Megaworld Corporation (MEG PM)

5. 522 September 2016
 About three-quarters of MEG’s revenues come from real estate sales, 21% from office
leasing, and the remainder are derived from commercial real estate, hotel operations and
other areas
 Its real estate sales have been mainly mid-range high-rise residential blocks in Metro
Manila and planned community townships in and around the Philippine capital. These
mixed-use developments combine residential units with leased offices for Business Process
Outsourcing (BPO). One of the latest and biggest of such developments is planned for
Bonifacio Global City, a fast-growing central business district alternative
 Although office and retail rents are only 21% of revenue, these divisions contribute
around 45% of net profit, and are helping to make the company’s business less cyclical
 MEG has a business model that aims to accommodate all the real estate needs of the
township population, where it aims to build BPO office buildings, condos for workers to live
in and commercial buildings to cater to residents’ shopping requirements
80
90
100
110
120
130
140
2
3
4
5
6
7
Sep-13 Jun-14 Mar-15 Dec-15 Sep-16
MEG PM (LHS)
Price relative to local index
(PHP) (%)
Sources: A. Stotz Investment Research, company data, Thomson Reuters
Revenue breakdown, by segment 2015
Megaworld Corporation (MEG PM)
Stock information:
Name: Megaworld Corp.
Ticker: MEG PM
Price (PHP): 4.60
Mcap: US$3,097m
3MADTO: US$5m
Beta: 0.9x
Sector: Financials
Industry: Real Estate
Major shareholders:
64% Alliance Global Group,
Inc.
2% Megaworld Corp.
34% Free float
Background: Megaworld Corporation is the Philippines’s top
residential condo developer by unit sales, and supplies mainly mid-
range high-rise blocks. It is also the largest office leasing company for
BPO locations. The company has built a wide range of mixed-use real
estate developments in Metro Manila.
Real estate sales 76% Office and retail rentals 21% Hotel operations and others 3%

6. 622 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 About three-quarters of MEG’s revenues come
from real estate sales,
 21% from office leasing,
 and the remainder are derived from commercial
real estate, hotel operations and other areas
Megaworld Corporation (MEG PM)

7. 722 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 Its real estate sales have been mainly mid-range
high-rise residential blocks in Metro Manila and
planned community townships in and around the
Philippine capital
Megaworld Corporation (MEG PM)

8. 822 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 These mixed-use developments combine
residential units with leased offices for Business
Process Outsourcing (BPO)
 One of the latest and biggest of such
developments is planned for Bonifacio Global
City, a fast-growing central business district
alternative
Megaworld Corporation (MEG PM)

9. 922 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 Although office and retail rents are only 21% of
revenue, these divisions contribute around 45%
of net profit, and are helping to make the
company’s business less cyclical
Megaworld Corporation (MEG PM)

10. 1022 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
 MEG has a business model that aims to
accommodate all the real estate needs of the
township population,
 where it aims to build BPO office buildings,
condos for workers to live in and commercial
buildings to cater to residents’ shopping
requirements
Megaworld Corporation (MEG PM)

11. 1122 September 2016
 About three-quarters of MEG’s revenues come from real estate sales, 21% from office
leasing, and the remainder are derived from commercial real estate, hotel operations and
other areas
 Its real estate sales have been mainly mid-range high-rise residential blocks in Metro
Manila and planned community townships in and around the Philippine capital. These
mixed-use developments combine residential units with leased offices for Business Process
Outsourcing (BPO). One of the latest and biggest of such developments is planned for
Bonifacio Global City, a fast-growing central business district alternative
 Although office and retail rents are only 21% of revenue, these divisions contribute
around 45% of net profit, and are helping to make the company’s business less cyclical
 MEG has a business model that aims to accommodate all the real estate needs of the
township population, where it aims to build BPO office buildings, condos for workers to live
in and commercial buildings to cater to residents’ shopping requirements
80
90
100
110
120
130
140
2
3
4
5
6
7
Sep-13 Jun-14 Mar-15 Dec-15 Sep-16
MEG PM (LHS)
Price relative to local index
(PHP) (%)
Sources: A. Stotz Investment Research, company data, Thomson Reuters
Revenue breakdown, by segment 2015
Megaworld Corporation (MEG PM)
Stock information:
Name: Megaworld Corp.
Ticker: MEG PM
Price (PHP): 4.60
Mcap: US$3,097m
3MADTO: US$5m
Beta: 0.9x
Sector: Financials
Industry: Real Estate
Major shareholders:
64% Alliance Global Group,
Inc.
2% Megaworld Corp.
34% Free float
Background: Megaworld Corporation is the Philippines’s top
residential condo developer by unit sales, and supplies mainly mid-
range high-rise blocks. It is also the largest office leasing company for
BPO locations. The company has built a wide range of mixed-use real
estate developments in Metro Manila.
Real estate sales 76% Office and retail rentals 21% Hotel operations and others 3%

12. 1222 September 2016
Sources: A. Stotz Investment Research, Bloomberg, company data, FactSet, Thomson Reuters
Revenue breakdown, by store brand 2015
Real estate sales
76%
Office and retail
rentals 21%
Hotel operations and
others 3%

14. 1422 September 2016
MEG: Leadership
Sources: A. Stotz Investment Research, company data, FactSet
Chairman&
President
2012 2013 2014 2015 Past 12 months
Andrew Lim Tan
1989 – Present

15. 1522 September 2016
'12 '13 '14 '15 PTM
5 3 1 6 4
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
3 3 1 3 3 8 5 1 9 5
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
6 6 5 7 7 3 3 2 3 3 8 6 1 9 7 8 4 1 10 4
Benchmarked against 180 large Real Estate companies worldwide.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
CEO, 1989 – Present
Andrew Tan
Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data.
Profitable Growth has
been volatile, but mostly
above average
MEG ranks better than
108 of 180 large Real
Estate companies
MEG: A. Stotz Profitable Growth

16. 1622 September 2016
'12 '13 '14 '15 PTM
5 3 1 6 4
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
3 3 1 3 3 8 5 1 9 5
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
6 6 5 7 7 3 3 2 3 3 8 6 1 9 7 8 4 1 10 4
Benchmarked against 180 large Real Estate companies worldwide.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data.
Profitable Growth has
been volatile, but mostly
above average
MEG ranks better than
108 of 180 large Real
Estate companies
Profitability is ranked #3,
Growth improved to #5
MEG: A. Stotz Profitable Growth
CEO, 1989 – Present
Andrew Tan

17. 1722 September 2016
'12 '13 '14 '15 PTM
5 3 1 6 4
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
3 3 1 3 3 8 5 1 9 5
'12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM '12 '13 '14 '15 PTM
6 6 5 7 7 3 3 2 3 3 8 6 1 9 7 8 4 1 10 4
Benchmarked against 180 large Real Estate companies worldwide.
Profitable Growth
Asset utilization Profit margin Sales growth Margin change
Profitability Growth
Source: A. Stotz Investment Research. Notes: 1 = top ranking and 10 = worst. Most recent year’s data is based on the past 12 months (PTM) of published data.
Profitable Growth has
been volatile, but mostly
above average
MEG ranks better than
108 of 180 large Real
Estate companies
Profitability is ranked #3,
Growth improved to #5
Profit margin is the
source of good profitability
Growth improvement
came from more Sales and
better margin
MEG: A. Stotz Profitable Growth
CEO, 1989 – Present
Andrew Tan

18. 1822 September 2016
 Do YOU want to see the Profitable Growth rank
for a company in YOUR portfolio?
 Leave a comment below with company name
and country of listing…and I’ll post it if I have it