The booming online bingo games market has driven a relentless 1,100 percent rally over the past two years, highlighting the high expectations investors have for the company and Internet-based gambling.
Chaired by ports and schools tycoon Eusebio Tanco and led by president Tsui Kin Ming, DigiPlus gained 5.4 percent on Wednesday to finish just below a record high of P16.90 per share.
Soaring values
The company is currently valued at P74.3 billion, surpassing the Gotianun family’s Filinvest Development Corp., and just a few billion pesos shy of tycoon Andrew Tan’s Alliance Global Group, which owns Newport World Resorts, malls, distilleries, and fast-food outlets.
“It’s been on a very long run; it has quintupled since end-June 2023. But I think there’s still price discovery going on,” Abacus Securities’ research head Nicky Franco told InsiderPH.
“The price discovery also relates to how big the eGames market will be. I don’t think anybody knows for sure but the trajectory of revenues and earnings suggests there’s a lot more growth moving forward,” he added.
Major funds taking notice
The company’s rise could make its stock an attractive target for large funds, as investors often screen by size.
“It has only three ratings on Bloomberg and I think there will be more coverage in the next few months,” Franco said.
DigiPlus, formerly known as Leisure and Resorts World Corp., saw first-quarter 2024 profits surge over four times to P2 billion, with revenues rising 226 percent to P13.6 billion, driven by BingoPlus and ArenaPlus games.
Bullish but watch technicals
“I’m bullish on the stock as well since it has first mover advantage in the eGames segment. This segment is expected to significantly outpace the growth of the overall gaming industry, at least in the near future,” Alfred Benjamin R. Garcia, head of research at AP Securities Inc., told InsiderPH.
But he cautioned that chart-based technical indicators are “starting to get overextended at this point”.
“Its last traded price offers a smaller upside to our [target price] of P18.39,” Garcia said. “While we’re not yet recommending for investors to take profits, the time to do so might be close at hand.”
Integrated casinos still rule, for now
DigiPlus still trails tycoon Enrique Razon Jr.’s Bloomberry Resorts Corp., operator of Solaire casinos, which has a market value of about P95 billion.
Franco expects Solaire will move to counter the rising competition from online games.
“Looks like they’re building up their team for online gaming. Eventually they will fight back but PLUS and others have a big head start,” he said.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
