SHARES in PLDT Inc. increased last week due to strong earnings, with a jump in net income and revenue prospects following significant developments.
Data from the Philippine Stock Exchange (PSE) showed the Pangilinan-led company ranking 11th in value turnover with P230.65-million worth of 179,345 shares exchanging hands from March 4 to 8.
The telco giant’s shares closed at P1,300.00 apiece on Friday, inching up by 1.1% from its P1,286.00 close on March 1. Year to date, the stock grew by 1.6%.
Manuel Antonio M. Castro, equity analyst at Regina Capital Development Corp. said that PLDT’s earnings would be the highlight for the week.
Earnings were in line with their estimates, which caused PLDT to trade sideways, Mr. Castro said in a Viber message.
“We think the recovery in prices on Friday can be traced to better earnings prospects for [PLDT] this year alongside the broad market rally,” Rastine Mackie D. Mercado, research director at China Bank Securities Corp., said in an e-mail.
He added that PLDT managed to increase on a weekly basis due to upbeat price action on Friday despite the trading in the red due to net foreign selling.
Mr. Mercado noted that the listed telco expects service revenues to grow by mid-single digit this year, faster than 2023’s low-single digit growth.
In 2023, PLDT’s attributable net income jumped to P26.61 billion from P10.49 billion in the prior year while its revenues also grew by P210.95 billion from P204.36 billion previously.
For Mr. Castro, he said that PLDT’s net income rose mostly as it came from a low-base which included one-off expenses.
“For this figure, we’re expecting PLDT to continue to register almost the same year on year growth rate it has been recording in the previous quarters, recording growth mostly from its fiber-based revenues,” Mr. Castro said.
He added that telco business right now has been rather stagnant as there are no major catalysts on the horizon.
Last week, reports showed that PLDT as obtained its first green loan at P1 billion from HSBC Philippines to fund the expansion and upgrade of its fiber network.
This said project will provide support to the company’s internet delivery platforms such as fiber fixed broadband, mobile data services, and carrier-grade Wi-Fi.
These green loans are a form of financing that allows borrowers to use the proceeds specifically for environmentally friendly initiatives.
Other reports also showed that PLDT Enterprise, the business arm of PLDT Inc. will be providing connectivity solutions to Charoen Pokphand Foods Philippines Corp. (CPF Philippines), which is a subsidiary of the Thailand-based conglomerate, Charoen Pokphand Group Company, Ltd.
The said partnership is aimed at improving CPF Philippines’ operations in delivering and distributing their aquatic and agricultural products with PLDT’s advanced technologies.
Another development for the Pangilinan-led telco is that it has established Digico, a digital entity that will leverage data assets from Manuel V. Pangilinan Companies and provide a platform for a serious digitalization effort.
The technology platform can help expand and seamlessly integrate services and capabilities. Additionally, payment and reward systems are expected to enhance the overall user experience.
The payments platform will provide an all-encompassing solution by consolidating the MVP Group’s various payment channels, resulting in a seamless, secure, and flexible experience for both customers and businesses.
These initiatives, said Mr. Mercado, is part of PLDT’s strategy of strengthening its position in the home broadband and enterprise markets given intensifying competition.
“Specifically for the green loan, this would allow PLDT to reaccelerate their fiber network rollout given nascent demand opportunities from unserved and underserved markets in the country,” he said.
Additionally, he said that Maya could benefit from the creation of Digico for this could enhance and expand its revenue base, use cases, and subscriber count given the expansive customer base of the wider MVP Group.
For Mr. Castro, the introduction of Digico is a highlight for the company as the service would add additional source of income for the group, which is welcoming news for investors.
“PLDT has, and will continue to invest heavily in their infrastructure, making their fiber services available to more areas,” he said.
Analysts said dividends may compel market players to consider PLDT.
“Dividends makes for an interesting play for investors as PLDT continues to payout 60% of its core net income to shareholders [and they] have been relatively stable and yields are in the high single digits,” Mr. Castro said.
He placed support levels at P1,275 and resistance levels at P1,315.
For Mr. Mercado, near-term price action could be bullish as investors price in the recently declared dividends.
“We think investor interest for telcos will remain lukewarm in the medium term given the lack of catalysts,” he said.
Additionally, he said that they are optimistic about PLDT’s prospects considering its legacy mobile business is expected to continue its recovery given its market-leading position in mobile subscribers.
Another consideration is the boost of revenues as its data center business is continuously growing, and lastly, PLDT’s efforts to improve free cash flow generation will have a positive impact on dividends.
“Immediate support and resistance for [PLDT] is at P1,273 and P1,315, respectively,” Mr. Mercado said.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Abigail Marie P. Yraola
