Sy-led SM Investments Corporation, one of the Philippines’ largest conglomerates, sees new growth in its logistics and renewable energy units even as its core real estate, retail, and banking businesses continue to thrive with the country’s economy.

“But, really, all of our businesses have actually been growing and expanding. I can't say that there's one that's going to grow faster than the other,” said SMIC President and CEO Frederic C. DyBuncio in an interview with Channel NewsAsia.

He noted that, “Although our three core businesses of retail, property, and banking, on their own, they're already very significant in their own way. So, the growth might continue to be there, but the growing sector for us is probably going to be the logistics and the renewable energy side of things.”

SMIC subsidiaries 2Go Group Inc. and Airspeed International Corporation are engaged in the logistics business, while its renewable energy business is primarily through Philippine Geothermal Production Company Inc. It also has a strategic stake in Citicore Energy REIT.

“We have our geothermal businesses. We have two operating geothermal assets today, and we have six new concessions that we want to develop and explore,” said DyBuncio.

He explained that, “one thing that's with geothermal is that it's actually a baseload business. So it will operate 24x7. We sell our steam to a power generator, and they're the ones who produce the electricity, but that's all baseload business.

“And, for us, having that as part of our group portfolio, it actually helps us be able to achieve our own sustainability goals as far as renewable energy is concerned.”

Meanwhile, DyBuncio continues to be optimistic about the SM Group’s prospects because “One, inflation is down. Second, unemployment is also down. It's down by 3.7 percent. And so that means that people have disposable income and more and more companies are coming in. They're expanding the BPOs.”

These factors are driving up consumption and growth in the Philippines’ consumer-driven economy, and he said that, “For SM, all of our businesses actually, on a daily basis, each consumer has a touch point on each of our businesses. So, as the economy continues to grow 5.5 to 6.0 percent and consumers continue to earn, they continue to spend, and each of those spending will actually benefit the whole SM Group’s businesses.”

DyBuncio said that, through SM Prime Holdings Inc., “We continue to expand on the malls. We continue to expand, particularly in the provincial areas, because we feel that the next growth drivers will be in the provinces, given that schools there are actually producing good quality students and they're now working also with business outsourcing companies.”

“So, there's a lot of disposable income and the retail will follow the malls wherever they go. And they've actually grown significantly year-on-year, and banks obviously will also be following through with that.”

Despite the positive outlook, DyBuncio said that SMIC’s stock is “definitely undervalued.” He cited the country's GDP growth of 5.5 to six percent, a young population of 110 million people (with an average age in the 20s), and SMIC’s pervasive consumer touchpoints across its diverse businesses.

"As long as the country continues to grow, as long as people continue to spend... our feeling is that our share price today is significantly undervalued, given the potential we have moving forward," DyBuncio concluded.