Brazil entry, player protection program lift DigiPlus shares

DIGIPLUS Interactive Corp. rose last week on updates about its overseas expansion and player protection initiative.

DigiPlus was the eighth-most actively traded stock at the Philippine Stock Exchange (PSE), with P1.22 billion worth of 55.40 million shares traded from Sept. 15 to 19.

Shares in the Tanco-led company closed at P23.65 apiece on Friday, up 18.8% from P19.90 a week earlier. The services index gained 5.1%, while the benchmark PSE index rose 2.5%.

Year to date, DigiPlus shares were down 12.9%. The PSE index fell 4% in the same period, while the services index grew 8.9% year on year.

The jump in DigiPlus’ share price was significantly influenced by news of its plan to diversify into traditional casinos and upcoming operations in Brazil, Jash Matthew M. Baylon, equity analyst at The First Resources Management and Securities Corp., said in a Viber message.

He said the index rose as investors hunted for bargains when it reached the 6,000 level, while optimism from Wall Street spilled over to the local market after the US Federal Reserve cut interest rates by 25 basis points for the first time this year.

Last week, DigiPlus said it would launch operations in Brazil on Sept. 22, marking its first international expansion. GamePlus will be the initial platform, offering 150 games in free-to-play and real-money formats.

The company said it is entering Latin America’s fastest-growing iGaming market after the Brazilian government approved regulations for online betting and gaming this year, allowing the entry of foreign players. By 2026, DigiPlus plans to launch BingoPlus in Brazil.

“[The] expansion in Brazil showed the firm’s goal to achieve its global growth strategy… and will introduce its entertainment services to new community which may attract new users and increase its user base,” Mr. Baylon said.

He added the launch aligns with DigiPlus’ plan to expand into other markets, including its recent move to divest in South Africa.

DigiPlus also partnered with Philippine First Insurance Co., Inc. to launch a surety bond program providing up to P1 million in coverage for verified players’ wallet balances, without requiring users to buy separate insurance.

“The surety bond will strengthen its user base as it will bring more confidence among its users. This move may also be aligned with the regulatory issues of online gaming in the country,” Mr. Baylon said.

Meanwhile, Reuters reported the US Federal Reserve lowered its policy rate by 25 basis points to a range of 4%-4.25% and signaled further easing but warned of sticky inflation.

For the second quarter, DigiPlus’ net income rose 30.2% to P4.2 billion from P3.23 billion a year earlier. Revenues climbed 30.6% to P24.71 billion from P18.93 billion.

For the first half, net income surged 60.9% to P8.4 billion from P5.22 billion a year earlier, while consolidated revenues jumped 46.7% to P47.78 billion from P32.56 billion.

Mr. Baylon attributed the growth to new games that boosted its user base and margins. He said the resolution of regulatory issues would help provide more clarity on the stock’s direction.

He said he sees “the P20 per share as the support, while the P25 and P30 level are the key resistance level.” — Abigail Marie P. Yraola