DigiPlus shares fall on regulatory concerns

By Pierce Oel A. Montalvo, Researcher

SHARES of DigiPlus Interactive Corp. declined last week amid investor concerns over the sustained impact of regulatory changes on its online gaming operations, despite the company’s declaration of P3.8 billion in dividends and efforts to diversify into offline gaming.

Data from the Philippine Stock Exchange (PSE) showed DigiPlus as the seventh most actively traded stock during the week, with 58.27 million shares worth P1.06 billion changing hands.

Shares of the digital gaming firm closed at P18.26 on Thursday, down 4.3% from P19.08 previously. This underperformed the benchmark PSE index (PSEi), which declined by 0.67%, while the services sector index rose by 1.27%.

Year to date, the stock posted a 12.72% gain, outperforming the PSEi’s 0.57% decline but lagging behind the services sector’s 15.72% increase.

Trading was suspended on Friday due to the Eid’l Fitr holiday.

In a disclosure on Tuesday, DigiPlus reported flat net income of P12.6 billion for full-year 2025. Total revenues rose by 12% to P84.2 billion, while earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 2% to P14.2 billion.

However, fourth-quarter performance weakened. Net income declined by 36% year on year to P2.5 billion, while revenues fell by 27% to P17.3 billion and EBITDA dropped by 32% to P3.1 billion.

The company attributed the fourth-quarter decline to the continued impact of the third-quarter delinking of electronic wallet (e-wallet) in-app access to licensed online gaming platforms, a regulatory adjustment that temporarily reduced user activity across its digital platforms.

In August, the Bangko Sentral ng Pilipinas (BSP) directed e-wallets, banks, and other supervised institutions to remove in-app gambling access. The central bank also proposed measures such as biometric identification checks, daily transaction limits, time-based payment restrictions, and tools for spending caps, voluntary breaks, and self-exclusion.

“DigiPlus flat earnings was driven by the recent regulatory issues which pushes the gaming platforms to remove their sites on online tech platforms including GCash,” said Jash Matthew M. Baylon, equity analyst at The First Resources Management and Securities Corp.

“On the positive note, the delinking of its site on GCash opens opportunities for the firm as it develop its own application,” he added.

Despite regulatory headwinds, DigiPlus maintained its dividend policy. The board approved a cash dividend of P3.8 billion, equivalent to 30% of full-year 2025 consolidated net income attributable to shareholders, or P0.83 per common share.

The dividends will be payable on or before April 15, 2026 to shareholders on record as of April 1, 2026.

The company ended 2025 with P23.4 billion in cash and cash equivalents, while debt stood at P745.8 million.

During the year, DigiPlus invested P12 billion in International Entertainment Corp. (IEC), a Hong Kong-listed firm that owns and operates New Coast Hotel Manila, a Philippine Amusement and Gaming Corp. (PAGCOR)-licensed integrated resort in Malate, Manila.

The investment provides DigiPlus an option to acquire a 53.89% stake in IEC, establishing what the company described as “a potential strategic offline platform designed to complement its digital network.”

Jeff Radley C. See, head trader at Mercantile Securities Corp., said the move into offline gaming could serve as a hedge against regulatory risks.

“The move of DigiPlus to invest in the offline gaming can safeguard them for future restrictions/regulations that the government might impose,” Mr. See said.

Mr. Baylon added that “the recent regulatory issue may also push DigiPlus to expand on offline gaming as it may cater traditional casino players and diversifying its income flow preparing for the potential headwinds on online gaming brought by regulatory pressures.”

DigiPlus also advanced its overseas expansion plans in 2025, establishing a Singapore hub for strategic partnerships and corporate functions. The company allocated P660 million in capital expenditures for its planned entry into Brazil and filed a license application with the Western Cape Gambling and Racing Board in South Africa.

However, Mr. Baylon said external factors may affect expansion timelines.

“We believe that DigiPlus expansion plans overseas could be hampered by the current tensions in the Middle East as the local currency continued to weaken which may affect its expansion costs,” he said.

He added that the conflict has affected global oil supply, which is “inflationary in nature, weakening the purchasing power of consumers as well as their disposable income, which could also affect DigiPlus performance as it heavily relies on consumers’ disposable income.”

Mr. See said expansion-related spending may have contributed to the company’s flat earnings.

“These expansions might be the reason why they have a flat income in 2025,” he said.

Looking ahead, analysts said regulatory developments will remain a key factor.

Mr. See said DigiPlus “is resilient since everything is online and people can easily access their gaming apps.”

He added that “there are also efforts from PAGCOR that the gaming might be available to e-wallets again. Early 2026, PAGCOR will be presenting to BSP a new proposition that would defend their return.”

For this year, Mr. Baylon said investors should monitor “the company’s overseas expansion as it may introduce its offerings on new environment as well could attract new players.”

He added that “DigiPlus earnings moving forward will normalize as headwinds started to die down.”

Mr. See said market participants are likely to focus on the company’s ability to navigate regulatory changes and execute its diversification strategy.

On the technical side, Mr. See placed support levels at P17 and P15, with resistance levels at P20.30 and P22.50.

Mr. Baylon, meanwhile, set support at P16.50 and resistance at P20.