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OUTLIER: Chelsea Logistics Holdings Corp.

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Outlier

By Mark T. Amoguis
Researcher

CHELSEA Logistics Holdings Corp. (CLC) was one of the most actively traded stocks last week following the official announcement of the Mislatel Consortium — of which CLC is a member – as the country’s new third telecommunications provider.

Data from the Philippine Stock Exchange showed a total of P450.74 million worth of 53.80 million CLC shares having exchanged hands on the trading floor on Nov. 19-23.

CLC shares went up 2% on a week-on-week basis to P7.79 apiece last Friday from the P7.64 finish on Nov. 16. Meanwhile, it shed by 10.3% for the year.

Propelling CLC’s market activity last week was the formal announcement of the National Telecommunications Commission (NTC) last Monday that the Mislatel Consortium — composed of Mindanao Islamic Telephone Co., Inc. (Mislatel), China Telecommunications Corp., and Dennis A. Uy’s Udenna Corp. and CLC — as the official third telecommunications provider in the country after being announced the provisional winner on Nov. 9 for completing the selection process.

The day after the official announcement saw 29.83 million CLC shares being traded compared to the 3.73 million shares having exchanged hands the day before, bringing the stock’s price to an intraday high of P9.5 per share before closing at P8.49 per share. Some traders then took profits the day after, bringing the stock’s closing price down to P7.81.




“The stock has been trading actively to the decision,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said.

“As the news formally came out, there were both speculator and profit takers who bought into and sold the issue respectively,” he said.

Unicapital Securities, Inc. certified securities representative Cristopher Adrian T. San Pedro shared the same assessment, saying that the market reaction “was obviously a sell on news given the extended run that it went through since Nov. 7.”

“I believe the market already perceive them as the clear winner given their two competitors were disqualified on the day of the bidding,” he said, referring to the Sear Telecommunications Consortium — led by Mindanao-based TierOne Communications International, Inc. and LCS Group of Companies of former Ilocos Sur Governor Luis “Chavit” C. Singson — and Philippine Telegraph and Telephone Corp.

After last week’s confirmation, the Mislatel group has a maximum of 90 days to submit its business plans among other requirements before it may receive its Certificate of Public Convenience and Necessity (CPCN), which is needed to operate as a telecommunications provider.

A realistic schedule for Mislatel’s start of commercial operations would be by mid-2019, according to Department of Information and Communications Technology Acting Secretary Eliseo M. Rio, Jr.

As soon as Mislatel secures the CPCN, the government will award radio frequency bands of 700 megahertz (MHz), 2100 MHz, 2.5 gigahertz (GHz), 3.3 GHz, and 3.5 GHz to the new telco.

The consortium is also open to partner with smaller telco players as well as incumbents Globe Telecom, Inc. and PLDT, Inc. for faster roll out.

CLC is the holding company of the shipping and logistics business segments of Udenna Group of Companies. Its subsidiaries include Chelsea Shipping Corp., Trans-Asia Shipping Lines, Inc., Udenna Investments B.V., Starlite Ferries, Inc., and Work-link Services, Inc.

CLC’s gross revenues grew by 28.9% to P978.61 million in the third quarter from P759.29 million last year. This brought the nine-month revenue to P3.69 billion, surging by 60.9% from P2.30 billion a year ago.

Meanwhile, its net loss for the third quarter widened by 147.1% to P310.78 million from P125.77 million. Its earnings for the nine months ended September slipped by 71.7% to P43.01 million from P151.83 million last year.

For this week’s trading, Regina Capital’s Mr. Limlingan gave the stock support and resistance prices of P7.05 and P8.50, respectively.

Meanwhile, Unicap’s Mr. San Pedro expects CLC to consolidate between a support level of P7.10 and P7.35 and resistance between P8.50 and P9.00.