Expectations of profitability boost PhilWeb’s stock price

Font Size


By Jobo E. Hernandez

PHILWEB Corp. was among the most actively traded stocks last week with traders taking their cue from news regarding the firm being in talks with an online gaming provider in a bid to return to profitability this year.

A total of 166.27 million PhilWeb shares worth P720.59 million were traded from Jan. 27 to 31, data from the Philippine Stock Exchange showed. This makes the stock the 12th most actively traded in last week’s session.

PhilWeb’s shares closed at P3.45 per share on Friday, down nine percent from P3.79 a week ago. Since the start of the year, the stock’s price has risen by 36.9%.

“PhilWeb almost hit its ceiling on Jan. 24, on the news that it will be profitable again this year, and [that] it will be having a strategic partnership with a local firm working with the ‘biggest POGO (Philippine Offshore Gaming Operators) operator in the world,’” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in an e-mail last Friday.

“These boost optimism in the investors’ sentiment that, after almost three years of losses, it will be able to turnaround into profits. This means that PhilWeb can declare dividends again,” she added.

Ms. Alviar noted that following the news, investors started to take positions and bargain hunt, causing a short-term rally of the stock. “This optimism [continued last week], reaching an intraday-high of P5.17 per share last Jan. 27, almost 37% up versus Jan. 24’s P4.12 closing price,” she said.

“However, profit taking prevailed as traders await further plans of PhilWeb for its recovery this year and to know the details on a strategic partnership. Some investors are waiting for the full year 2019 results to see if PhilWeb were able to continue to trim losses,” Ms. Alviar said.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan shared this assessment, saying in a phone interview that investors are still speculating on the company’s profitability as the reported partnership “is still on the table.”

PhilWeb Vice-Chairman Crisanto Roy B. Alcid told reporters on Jan. 23 that the company was “officially in negotiations” with a local firm for a “strategic partnership” in order to expand its e-games and e-bingo business. He declined to identify the firm, but noted it to be working with “one of the biggest POGO operator in the world.”

PhilWeb is owned by Gregorio Ma. Araneta III after Roberto V. Ongpin sold all his shareholdings in the firm in 2017. The company draws the bulk of its revenues from about 66 e-Games outlets and more than 20 e-bingo outlets.

The company aims to have at least 100 e-gaming locations within the year.

Starting this month, PhilWeb will be under the leadership of Senior Vice-President for Gaming Brian K. Ng, who is replacing President Dennis O. Valdes as he moves to Ongpin-led Alphaland Corp.

The company trimmed its attributable net losses by 82.1% to P4.5 million in the third quarter last year from P25.2 million in the same period in 2018. In the nine months to September, its net loss was at P26.79 million, 62% less than P70.53 million in January-September 2018.

PhilWeb previously had 288 operating e-Games cafés licensed by the Philippine Amusement and Gaming Corp. (Pagcor), but the regulatory authority declined to renew the firm’s license in 2016, hampering its operations.

PhilWeb was able to resume operations with an initial 16 electronic gaming locations in December 2017 following the resolution of issues with Pagcor. The firm was then allowed to fully resume its operations in March 2018.

Regina Capital’s Mr. Limlingan placed the stock’s support at P3.30 and resistance at P4.80.

For Philstocks’ Ms. Alviar: “We see support around P3.20 and at psychological support of P3.00, while resistance is at P4.00 and second resistance is at P4.50.”