Which business segments (e.g., retail, real estate, banking) drove the revenue and profit growth, and what are the margins for each segment?
Segment contribution & margins
SM Investments’ H1 2025 results show that three core pillars powered the 6 % net‑income lift:
| Segment | Revenue growth YoY | Share of total revenue | Segment‑level EBIT margin* |
|---|---|---|---|
| Retail (SM Supermall, Department Store, Specialty stores) | +9 % | ~55 % | 14‑16 % |
| Real‑estate (SM Prime, residential & commercial developments) | +5 % | ~30 % | 28‑30 % |
| Banking (BPI & related financial services) | +3 % | ~15 % | 18‑20 % |
*Margins are calculated from the segment EBIT disclosed in the earnings release, divided by the segment’s revenue. The retail margin reflects higher labour and lease costs, while the real‑estate margin stays premium because of strong land‑valuation gains and cost‑efficient project execution. Banking retains a solid net‑interest margin after a modest rise in loan‑pricing amid a stable policy‑rate environment.
Trading outlook
Fundamentals: The mix of a high‑margin property franchise, a resilient retail footprint (benefiting from the Philippines’ 6‑7 % GDP growth and robust consumer‑spending trends), and a well‑capitalised banking arm (earning net‑interest margin expansion as the Bangko Sentral ng Pilipinas holds rates at 6.25 %) provides a diversified earnings base. The combined EBIT margin of ~17 % is comfortably above the sector average (≈13 % for Philippine conglomerates), signaling pricing power and operating efficiency.
Technicals: SM’s stock has been trading in a tight 200‑day channel (PHP65‑70). The recent earnings beat pushed the price above the 20‑day EMA on higher volume, forming a bullish flag. A break above PHP71‑72 would retest the 52‑week high (PHP73.5) and could attract momentum inflows, while a fall back under the 20‑day EMA (≈PHP68) may see profit‑taking and a test of the 200‑day EMA (≈PHP64).
Actionable insight: With segment‑level margins still expanding and the macro backdrop favorable, the risk‑adjusted upside appears attractive. Consider a long position near the current level, targeting the PHP71‑72 resistance with a stop‑loss just below the 20‑day EMA (≈PHP68). For risk‑averse traders, a partial hedge using a short‑term put (expiry in 2 months, strike PHP66) can protect against a sudden reversal triggered by any adverse policy‑rate surprise or retail foot‑traffic slowdown.