MEGAWIDE Construction Corp. is poised to shift toward a more predictable, housing-led earnings model as its participation in the government’s Expanded Pambansang Pabahay para sa Pilipino (4PH) Program gains scale, First Metro Securities said.
The brokerage estimated that 16,700 units from Megawide’s existing 4PH projects could generate P28.3 billion in incremental revenue from the second half of 2026 through 2028, with the program potentially accounting for 36 percent of total revenue by 2028.
First Metro said the development marked an evolution in the Megawide story, which previously was centered on repairing its balance sheet and strengthening its core construction business.
“We now believe 4PH adds a sizeable, policy-backed, and higher-visibility earnings platform,” analysts Mark Angeles and Kyle Garcia said.
The analysts said 4PH could provide Megawide with a more visible earnings and cash-flow stream than traditional construction projects, where collections can be prolonged and uneven.
Under the housing program, payments are tied to construction milestones and supported by Pag-IBIG Fund-linked financing, potentially allowing cash inflows to track more closely with project execution.
“The significance of 4PH lies not only in the revenue uplift but also in the quality and visibility of the earnings stream,” the brokerage said.
Megawide’s participation in the program is anchored by its partnership with Pag-IBIG Fund through wholly owned subsidiary Megawide Dreamrise Residences Inc.
Under a December 2025 investment and partnership agreement, Pag-IBIG will invest P10 billion through perpetual preferred shares issued by Megawide Dreamrise. The proceeds will support the delivery of at least 7,000 affordable housing units over the next two to three years.
Megawide has also outlined a long-term aspiration to develop 100,000 units under 4PH, with 50,000 units already identified in its five-year pipeline. Projects have been identified in Cavite, including developments in Imus, Dasmariñas and Bacoor.
First Metro Securities expects the initial 16,700 units currently included in its estimates to provide a significant lift to Megawide’s revenue profile as bookings begin in the second half of 2026.
The brokerage forecasts total revenue to increase 20.1 percent to P21.24 billion in 2026 and another 32.4 percent to P28.11 billion in 2027.
It expects Megawide to post a net loss of P164 million in 2026 before swinging to a P1.09-billion profit in 2027, as 4PH contributions and lower net interest expenses improve profitability.
The housing program is particularly important because it could provide a counterweight to the cyclical nature of Megawide’s traditional construction operations, First Metro Securities said.
Construction remains supported by opportunities in 4PH, private-sector partnerships and priority government sectors such as housing and education.
Meanwhile, the Parañaque Integrated Terminal Exchange is expected to benefit from increased foot traffic following the opening of a new LRT-1 station, while PH1 World Developers continues to expand its property portfolio in areas such as Cavite.
The brokerage also expects Megawide’s balance sheet to continue improving. Following the monetization of its stake in Citicore Renewable Energy Corp., First Metro Securities expects Megawide’s net debt-to-equity ratio to fall to around 0.8 times by end-2027 from 1.4 times in 2025.
The company’s return to dividend payments could also further support investor sentiment.
Megawide declared a P0.145 per share dividend in June and has indicated the possibility of another payout before year-end. Management has also raised its maximum allowable cash dividend payout to 50 percent of the previous year’s net income from 30 percent and plans to establish regular payouts starting in 2027.
Against this backdrop, First Metro reiterated its “buy” recommendation on Megawide and raised its 12-month price target to P7.50 from P4.50. The new target represents a 57-percent upside from Megawide’s P4.77 closing price on Aug. 28.
First Metro warned, however, that delays in 4PH approvals, construction milestones or Pag-IBIG-linked collections could defer revenue recognition and weaken the expected cash conversion.
Other risks include weaker-than-expected demand for affordable housing, a slower Philippine real estate recovery and a prolonged high-interest-rate environment.
Megawide shares on Thursday rose P0.28, or 5.77 percent, to close at P5.13 each.
