By Abigail Marie P. Yraola, Researcher
SHARES of DigiPlus Interactive Corp. fell last week despite news of its global expansion plans, dragged by negative market sentiment and US inflation data, analysts said.
The listed digital gambling company had the seventh-biggest value turnover at P629.43 million worth of shares on April 8 to 12, according to data from the Philippine Stock Exchange (PSE).
Financial markets were closed on April 9 and 10, both national holidays.
DigiPlus shares closed at P11.44 each on Friday, 15% lower than a week earlier. The stock has risen by 43% this year.
The company was affected by general market sentiment amid higher-than-expected local and US inflation numbers, Aniceto K. Pangan, a trader at Diversified Securities, Inc., said in a Viber message.
Its share price increased to as high as P14.16 after good earnings results last month, he said, adding that investors saw this as an opportunity to take on profits.
The overall market sentiment for Digi-Plus remained bullish despite short-term profit taking, Jeff Radley C. See, head trader at Mercantile Securities Corp., said in an e-mail. “Prospects are good since the company will target overseas [markets], which will boost their top line.”
Its share price rose last month due to favorable sentiment about its performance, Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message. Adding to the optimism was the company’s plan to expand globally, he added.
“This multipronged approach underscores DigiPlus’ commitment to bolster both its offline and online presence,” he said.
DigiPlus is considering expanding to markets overseas with a large Filipino population and in the provinces. It also aims to boost its presence in the gaming market by using new technologies.
The company might also include nongaming elements such as movies and a live sports streaming channel to its digital platforms.
Mr. Arce said this announcement could boost its stock price. “Market players may view this as a strategic move to tap into new markets and diversify revenue streams, which could be perceived as favorable for the company’s long-term growth potential.”
But the international expansion comes with risks, he added.
DigiPlus Interactive Corp. should take into account the culture, regulatory requirements, and competition in its target markets, Mr. Arce said.
Setting up physical locations in provincial markets might also require significant investment and operational resources, he added.
DigiPlus income grew almost four times to P2 billion in the fourth quarter from a year earlier, while revenue more than tripled to P11.3 billion.
“Given its strong performance in the fourth quarter, it should sustain its growth track record going into the first quarter,” Mr. Pangan said. “It should continue to sustain its three-digit percentage income growth this year.”
He placed immediate support at P11 and immediate resistance at P12.36.
Mr. See expects the stock to move sideways. “Investors will continue to see profit taking due to its run from P8 to as high as P14.16… Support levels will be at P11 and P10.28.”
Mr. Arce expects the company’s income to hit P5.36 billion this year. “Targeting areas with large Filipino populations and expanding into provincial markets can open up untapped revenue streams and broaden the company’s customer base.”
He placed the stock’s support level at P11 and resistance at P12.50 to P14.