1. P-H-O-E-N-I-X PETROLEUM PHILIPPINES, INC. Case Presentation by Group C2 Sylvester Lumbao Daniel Ortega Benedict Santos

2. PRESENTATION SUMMARY  Case Context  Problem Definition  Analysis  Decision

3. CASE CONTEXT Point of view  Potential investor to the stock market planning to buy shares of stocks of P-H-O-E-N-I-X Petroleum Philippines, Inc. (PPPI or the “Parent Company”)

4. CASE CONTEXT Historical share price  Share price of the Company has been on a downward trend starting from March 2012 up to the present;  Share price dipped to its lowest point since 2010 on August 25, 2015 at the price of Php2.95/share;  August 24, 2015 was the Black Monday Stock Market Crash led by China;  On August 24, 2015, the BOD announced the plan to raise up to Php2 billion from sale of preferred shares.  As of November 17, 2015, share price closed at Php3.70 with a total market capitalization of Php5,286 million.

5. CASE CONTEXT  Historical share price (source: edge.pse.com.ph)

6. PROBLEM DEFINITION Given the current financial situation of the Company and the business environment, would you buy stocks of the Company in the stock market?

7. CASE ANALYSIS Internal Assessment  Organization  Operational Highlights  Management  Financial Analysis  Company updates External Assessment  Competition  Crude oil prices (historical, forecast)  News about the Company

8. CASE ANALYSIS Internal Assessment

9. CASE ANALYSIS I. Organization  Ultimate Parent Company is Udenna Corporation – which is engaged in (i) acquisition and management of rights, assets, business and property, and (ii) trading of pollution control devices;  The Company is 41% owned by P-H-O-E-N-I-X Petroleum Holdings, Inc. (PPHI)

10. I. Organization

12. CASE ANALYSIS II. Operational highlights  Significant marketing activities which include the following among others:  partnership with NBA;  Support for Gilas Pilipinas;  Support for Ms. Earth 2014.

13. CASE ANALYSIS II. Operational highlights  Major capital expenditure:  New Pier in Calaca Batangas;  Expansion in Cagayan Storage;  61 on-going construction of Phoenix Service Stations;  Construction of corporate headquarters in Davao;  Acquisition of 14,000 Metric Ton Dead Weight Marine Tanker;  Acquisition of Land in Aklan for future expansion.

14. CASE ANALYSIS II. Operational highlights  ISO Certifications for receiving, storage, distribution of petroleum fuels for the following:  Davao Terminal – include Plane refueling service;  Calaca Terminal;  Zamboanga Depot – include Plane refueling service;  Misamis Oriental Depot;  Bacolod Depot.  Several CSR programs

15. CASE ANALYSIS II. Operational highlights  Awards given to the Company include:  Best Independent Oil Company in Asia in 2013 – World Finance Magazine;  Top 7 importer in the Philippines;  No. 1 importer in Davao for 3 consecutive years;  Top 3 importer in Cagayan de Oro for 2013;  Top 6 importer in the Port of Batangas for Jan-June 2013;  Top 2 tax payer in the city of Cebu among supplier of goods and services in 2011.

16. CASE ANALYSIS III. Management  The President/CEO garnered the following awards in 2014:  Outstanding Filipino Achiever for Entrepreneurship – Golden Globe Annual Awards;  Most Outstanding Mindanao Business Leader – 3 rd Mindanao Business Leader and Entrepreneur Awards.  Some members of the management are included in pending cases:  Independent Director has a pending case with the Sandiganbayan for alleged violation of Anti-Graft and Corrupt Practices Act;  The President/CEO of the Company has a pending case with the court of appeals for alleged violation of Tariff and Customs Code.

17. CASE ANALYSIS IV. Financial Analysis  Common-size analysis (Php’000)

18. CASE ANALYSIS IV. Financial Analysis  Common-size analysis (Php’000)

19. CASE ANALYSIS IV. Financial Analysis  Common-size analysis (Php’000)

20. CASE ANALYSIS IV. Financial Analysis  Common-size analysis (Php’000)

21. CASE ANALYSIS IV. Financial Analysis  Trend analysis (Php’000)

22. CASE ANALYSIS IV. Financial Analysis  Trend analysis (Php’000)

23. CASE ANALYSIS IV. Financial Analysis  Trend analysis (Php’000)

24. CASE ANALYSIS IV. Financial Analysis  Trend analysis (Php’000)

25. CASE ANALYSIS IV. Financial Analysis  Ratio analysis

26. CASE ANALYSIS IV. Financial Analysis  Ratio analysis

27. CASE ANALYSIS IV. Financial Analysis  Ratio analysis

28. CASE ANALYSIS IV. Financial Analysis  Ratio analysis

29. CASE ANALYSIS V. Company updates  On October 31, 2015, the SEC favorably considered the issuance of Php2 billion worth of preferred shares subject to the submission and fulfilment of certain conditions;  On November 10, 2015, the Company declared cash dividends for preferred shares at 8.25% per annum.  On November 12, 2015, the Company released the result of its 3 rd Quarter performance with the following contents:  Company posted a net income of Php758 million or a 50% growth;  29% increase in sales volume driven by increase in retail sales by 33% and commercial, industrial and aviation by 27%;  Growth in number of retail station from 418 to 447;

30. CASE ANALYSIS External Assessment

31. CASE ANALYSIS I. Competition

32. CASE ANALYSIS II. Crude oil prices (historical)

33. CASE ANALYSIS II. Crude oil prices (forecast)

34. DECISION Given the current financial situation of the Company and the business environment, we are going to BUY shares of the Phoenix Petroleum Philippines, Inc.