First Pacific's quiet re-rating: a credit upgrade, a new copper mine, and a gas hiccup

A BBB upgrade re-bases the asset story, Silangan nears production, and the Shell force majeure ties PacificLight to the Middle East

0142.HK · Earnings Call · 2026-08-27

First Pacific's 1H 2026 print was, on the surface, a steady-as-she-goes conglomerate report: recurring profit down 1% to the second-highest level ever on weaker rupiah and peso. “Our recurring profit was down 1%, it was still the second highest we have ever achieved at First Pacific in our 45 year or so history.” — John Ryan, CEO or Senior Executive · 2026-08-27 But beneath the FX noise, three things changed that matter more than the headline: a credit rating upgrade that re-bases the asset story, a new copper-gold mine about to open, and a gas-supply hiccup at the Singapore power plant that ties directly into the Middle East conflict dominating global markets.

The credit upgrade is the real headline

For a holding company that has long traded at a deep discount to a softly-accounted NAV, a rating agency putting a hard number on its biggest asset is meaningful. S&P upgraded First Pacific to BBB with a stable outlook, and the CEO was explicit about what drove it:

S&P explained that their value for our stake in MPIC doubled from $1.9 billion to $3 billion.
John Ryan, CEO or Senior Executive · 2026-08-27

That is the first external validation of the long-argued case that the value of MPIC — carried at $1.2 billion since the 2023 privatization — is far too low. As John Ryan noted, the market caps of Meralco and Maynilad make that valuation look small, and the credit rating keyword spiked to the top of the company's quarterly trajectory in 20262 for good reason: a BBB with stable outlook resets what the market discounts. With a potential toll-roads merger with FMC Group under due diligence (per Chris Young), a third hard valuation for MPIC's pieces would make the NAV discount even harder to defend.

Catalysts and risks on the edges

The Philex story has been building for years, but commercial production at the Silangan copper-gold mine — targeted for end-2026 — is now imminent. The CEO flagged metal grades far above Padcal's, and there's real excitement; the call even offered fund managers a mine tour. Add Padcal's contribution doubling in 1H on higher metal prices, and the mining segment is transitioning from story to earnings. PLDT's digital bank Maya is another re-rating candidate. Contribution to PLDT profit rose just under 40% to PHP 559 million in 1H, and analyst Timothy's question put a concrete market comp on the table: GCash is reportedly looking at listing in October at an ~$8 billion valuation. Chris Young pushed back on a direct comparison — “The real strength of Maya is in its fintech platform, and particularly the banking platform... it would be an intention to list Maya at some stage in the not too distant future” — Christopher Young, Management · 2026-08-27 — but the GCash comp makes the option more tangible than a year ago, when Stan Yang called an IPO “certainly not this year. But as we head into sometime in next year.” — Stanley H. Yang, Executive Director of MPIC (subsidiary of First Pacific) · 2025-08-28 The financial management is equally calm on the $350 million bond maturing in September 2027, with CFO Joseph Ng reiterating the preference remains “to go for a bond if the market is there and if the terms and pricing are palatable to us” — Hon Pong Ng, Chief Financial Officer · 2026-03-31 — a recurring, well-managed theme across calls. The most genuinely new item was the Shell Force majeure on gas supply to PacificLight, the Singapore LNG plant. Joseph Ng explained that Shell triggered a force majeure provision on Middle East / Qatar gas but that, commercially, “they're helping us to source the kind of alternate gas from other places.” — Hon Pong Ng, CFO · 2026-08-27 The net financial impact so far is "not severe" — some better margins on other contracts offset it — but this is exactly the real-economy transmission that global keywords like "Middle East conflict" have been flagging. It also explains why PLP's core profit fell 26% in 1H on lower non-fuel margins under new retail contracts.

The market is looking the other way

The contrast with the market's current fixation is striking: the global top keywords for 20263 are dominated by tariff refunds (IEEPA refund, net tariff refunds), and a parade of recent reporters — ANF, BBY, BURL, DG, DLTR, HPQ — all cited tariff refunds as tailwinds. First Pacific is entirely absent from that theme. Its story is different: record highs at Indofood and Metro Pacific, a credit upgrade, a new mine, a fintech inflection, and a gas-supply hiccup. The company itself argues it's undervalued — “In comparison to our peers, I think we can continue to consider ourselves to be undervalued.” — Christopher Young, Management · 2026-08-27 There are caveats. The system loss charge question hanging over Meralco (the president's suggestion that generators rather than consumers pay it) remains unresolved, and the CEO's deflection on Indofood's payout ratio, when asked what it will do with ~$3 billion of cash, suggests no quick answer. But for a conglomerate, the quarter was a meaningful step: external validation of asset values, a mine about to start production, and a fintech now being priced against peers. The credit upgrade alone justifies re-reading the NAV math.