INVESTORS turned bullish on PLDT, Inc. last week after the release of its first-quarter earnings report, which was ahead of forecast for both net income and core profit, analysts said.
Data from the Philippine Stock Exchange (PSE) showed a total of 888,690 PLDT shares worth P1.68 billion exchanged hands from May 10 to 13, making it the sixth most actively traded stock last week.
The company’s shares finished at P1,930 apiece on Friday, up by 2.1% week on week. Year to date, the stock’s price increased by 6.5%. Local financial markets were closed on May 9 due to the national elections.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said PLDT’s movement was mainly anchored on its recently released quarterly income report, which was mildly ahead of the street’s forecasts.
In a separate e-mail, Philippine National Bank Senior Equity Research Analyst Jonathan J. Latuja said that apart from the earnings results, which he said were generally in line with expectations, no developments drastically affected the stock price.
Last Tuesday, the telco giant announced that it was planning to build more data centers as the group is now approaching capacity limits.
On May 5, PLDT Chairman Manuel V. Pangilinan said that the company had effectively been given license for its enterprise side to go ahead and expand.
The company’s goal is to position the country as Asia-Pacific’s next digital hub and destination. PLDT has been serving the requirements of some global technology companies through its data centers.
Mr. Latuja said the strategy is expected from PLDT and that its new business segment is a relevant growing space that the telco company must be present in. But he said its contribution to PLDT’s topline and bottom line would not be as significant as its core telco businesses, namely: fixed line and wireless services.
“The company’s performance in these two segments will still be the major drivers of their financial performance which will ultimately reflect on their share price and dividend payments,” he said.
Mr. Limlingan said PLDT “is positioning itself to capture the bulk of the potential $2.8-billion cloud market by 2025, which would help drive their growth whether or not the hybrid or work from home setup stays.”
He said the news would appeal positively to market players.
PLDT’s attributable net income climbed by 56.4% to P9.078 billion in the first three months of the year from P5.803 billion in the same period last year.
Its consolidated revenues likewise went up by 4.6% to P50.148 billion in the first quarter from P45.677 billion a year ago.
The company hiked its capital expenditure this year to P85 billion to support revised requirements for home broadband and data center businesses.
Mr. Latuja sees PLDT’s full-year earnings, excluding one-off gains and expenses, to be flat at P29.5 billion.
He also said that the company’s performance in the fixed-line segment, particularly its fiber business, market share protection in the mobile and wireless segment, possibility of higher dividend payments, and potential growth of its digital banking subsidiary might compel investors to look at PLDT.
For this year, Mr. Limlingan expects to see a double-digit growth for PLDT’s net income, driven by its home broadband and enterprise segments.
“We also project [PLDT’s second-quarter net income] to jump by double-digit year on year, albeit coming in sequentially lower, assuming that no additional gains from preferred share liabilities extinguishment will be booked.”
“The local broadband market is yet to reach maturity, and PLDT has one of the largest broadband subscriber base of around 4.08 million — well positioned to capture the industry’s growth,” he added.
Mr. Limlingan pegs PLDT’s support this week at P1,843 — its 100-day moving average — and its immediate resistance level at P1,949.
“Once pierced, the next resistance awaits at P1,980,” he 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