INVESTORS snatched up fiber internet company provider Converge ICT Solutions, Inc. shares last week following a high credit rating given for its bond offering and increased international network facility.
Data from the Philippine Stock Exchange (PSE) showed Converge ranked 11th in value turnover with a total of P485.16-million worth of 15.14 million shares traded from Dec. 27 to 31.
Converge closed at P31.90 apiece on Friday, down 3.3% from P33.00-per-share close on Dec. 24. Shares in the company have more than doubled since the start of 2021.
“Converge was among the active stocks this week after being given the highest credit rating for its bond offering and further increasing its international network capacity by 1.3 TBPS (terabits per second),” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Friday.
“Investors reacted positively with this disclosure through accumulation of the shares while transacted volume increased by more than 40%,” he added.
The company, which aims to cover 55% of Philippine households by 2023, said in a statement that it increased its international network capacity by 1.3 TBPS through its C2C (city-to-city) cable system.
The cable system connects the Philippines to Hong Kong, Taiwan, Singapore, Japan, Korea, and China. Converge said it is part of the EAC-C2C (East Asia Crossing-city-to-city) network, which spans 17,000 kilometers.
“It is our vision to make the Philippines a digital hub in Asia and securing much-needed international bandwidth is key to realizing this vision,” said Dennis Anthony H. Uy, founder and chief executive officer of Converge.
In a separate report, Philippine Ratings Services Corp. (PhilRatings) has granted Converge with the highest credit rating of PRS Aaa with a stable outlook for its planned maiden bond issuance worth P5 billion.
On its website, PhilRatings says that a company rated PRS Aaa has a “very strong” capacity to meet its financial commitments “relative to that of other Philippine corporates.”
Mr. Pangan expects Converge’s revenue to continue growing by double digits this year.
Converge’s revenue rose 76.4% to P18.83 billion during the January to September period due to significant growth from its residential segment.
Its net income meanwhile more than doubled to P5.20 billion in the nine months ending in September from P2.19 billion in 2020.
For this week, Mr. Pangan pegged the stock’s support at P30.90 and its immediate resistance at P33.00.
“As valuation runs high at price to earnings ratio of more than 30, we may expect the price to consolidate with a possibility of further downward correction [this] week with the negative sentiment prevailing in the market due to sudden increase in infection rates,” added Mr. Pangan. — L.O. Pilar
