Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

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<li>
<a href="https://www.smartkarma.com/entities/digiplus-interactive-corp" target="_blank" data-smartkarma-citation="entities:23060:1" rel="noopener">DigiPlus Interactive (PLUS PM)</a> presented PSE Star investor day yesterday and briefly analyzed two game-changing catalysts from the call: a) CasinoPlus acquisition and b) Brazil license. </li>
<li>The expected TAM associated with e-games/Bingo in Brazil is 250 bn pesos (4 bn USD), compared to the Philippines, which is currently cycling at 160 bn pesos (Q3 PAGCOR data). </li>
<li>The stock trades at 7.8x FYPE with 15% of the market cap in cash and a 3.8% dividend yield (30% payout ratio) with a seasonal uptick in Q4 FY24. </li>
</ul>



DigiPlus Interactive (PLUS PM) presented PSE Star investor day yesterday and briefly analyzed two game-changing catalysts from the call: a) CasinoPlus acquisition and b) Brazil license. 
The expected TAM associated with e-games/Bingo in Brazil is 250 bn pesos (4 bn USD), compared to the Philippines, which is currently cycling at 160 bn pesos (Q3 PAGCOR data). 
The stock trades at 7.8x FYPE with 15% of the market cap in cash and a 3.8% dividend yield (30% payout ratio) with a seasonal uptick in Q4 FY24. 


DigiPlus (PLUS PM): Brazil License And CasinoPlus Acquisition Game Changing Catalysts For The Future

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<li>
<a href="https://www.smartkarma.com/entities/digiplus-interactive-corp" target="_blank" data-smartkarma-citation="entities:23060:1" rel="noopener">DigiPlus Interactive (PLUS PM)</a> reported a solid Q3 2024 with core revenues/profits up 171%/243%YoY.  QoQ revenues remained flat as competition ramped up. </li>
<li>The company paid off all its gross debt, and net cash increased to 12 bn pesos (around 15% of market capitalization) </li>
<li>Trading at 8.2/6.4x FY24/25 PE, with 15% of the market cap in cash and a 5% dividend yield, the stock is worth considering. </li>
</ul>



DigiPlus Interactive (PLUS PM) reported a solid Q3 2024 with core revenues/profits up 171%/243%YoY.  QoQ revenues remained flat as competition ramped up. 
The company paid off all its gross debt, and net cash increased to 12 bn pesos (around 15% of market capitalization) 
Trading at 8.2/6.4x FY24/25 PE, with 15% of the market cap in cash and a 5% dividend yield, the stock is worth considering. 


DigiPlus Interactive Corp (PLUS PM): Solid Q3 2024, Enter the Peak Q4 Season

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<li>
<a href="https://www.smartkarma.com/entities/digiplus-interactive-corp" target="_blank" data-smartkarma-citation="entities:23060:1" rel="noopener">DigiPlus Interactive (PLUS PM)</a> is the Philippines platform for Bingo Plus and other e-casino games, trading at 7x in the midst of &gt;100% growth in revenue/profitability in 2024. </li>
<li>The company is net cash with a &gt;50% ROE and is in an industry forecast by PAGCOR (regulator) to grow at least 15% CAGR in the future years.</li>
<li>We expect explosive Q2 revenue/profit growth of 226%/298% YoY which would act as a share price catalyst. We calculate a dividend of 0.80-1 peso/share (30-40% payout ratio), equating to a 4-5% yield.</li>
</ul>



DigiPlus Interactive (PLUS PM) is the Philippines platform for Bingo Plus and other e-casino games, trading at 7x in the midst of &gt;100% growth in revenue/profitability in 2024. 
The company is net cash with a &gt;50% ROE and is in an industry forecast by PAGCOR (regulator) to grow at least 15% CAGR in the future years.
We expect explosive Q2 revenue/profit growth of 226%/298% YoY which would act as a share price catalyst. We calculate a dividend of 0.80-1 peso/share (30-40% payout ratio), equating to a 4-5% yield.


Digi Plus Interactive (PLUS PM): Bingo Plus Platform, Trading At 7x PE with >100% Growth In 2024

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<li>We are slowly building out a high-conviction coverage of ideas for the mid and small-caps in the Philippines. </li>
<li>We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers. </li>
<li>We like <a href="https://www.smartkarma.com/entities/ginebra-san-miguel-inc" target="_blank" data-smartkarma-citation="entities:23029:1" rel="noopener">Ginebra San Miguel (GSMI PM)</a>, <a href="https://www.smartkarma.com/entities/the-keepers-holdings-inc" target="_blank" data-smartkarma-citation="entities:23003:1" rel="noopener">The Keepers Holdings (KEEPR PM)</a>, <a href="https://www.smartkarma.com/entities/digiplus-interactive-corp" target="_blank" data-smartkarma-citation="entities:23060:1" rel="noopener">DigiPlus Interactive (PLUS PM)</a>. We will also be exploring <a href="https://www.smartkarma.com/entities/centro-escolar-university" target="_blank" data-smartkarma-citation="entities:22989:1" rel="noopener">Centro Escolar University (CEU PM)</a> </li>
</ul>


We are slowly building out a high-conviction coverage of ideas for the mid and small-caps in the Philippines. 
We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers. 
We like Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM), DigiPlus Interactive (PLUS PM). We will also be exploring Centro Escolar University (CEU PM) 


Shortlist of High Conviction Philippines Equity Ideas

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

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<li>The review period for the February rebalance of the <a href="https://www.smartkarma.com/entities/philippines-stock-exchange-psei-index" target="_blank" data-smartkarma-citation="entities:22912:1" rel="noopener">Philippines Stock Exchange PSEi Index (PCOMP INDEX)</a> ends in two weeks.</li>
<li>There could be two changes for the index with passive trackers needing to trade between 23-64x ADV in the stocks.</li>
<li>The passive buying is a lot larger than the passive selling, there will be funding outflows for the other index constituents; some stocks will have over 1x ADV to trade.</li>
</ul>


The review period for the February rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) ends in two weeks.
There could be two changes for the index with passive trackers needing to trade between 23-64x ADV in the stocks.
The passive buying is a lot larger than the passive selling, there will be funding outflows for the other index constituents; some stocks will have over 1x ADV to trade.


PCOMP Index Rebalance Preview: Two Changes Likely in February

Philippines

DigiPlus Interactive Corp. provides gaming and leisure facilities. The Company offers multi-gaming platforms, numerous products, and games with a strong distribution network of entertainment facilities in neighborhood sites. DigiPlus Interactive serves customers in the Philippines.

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DigiPlus Interactive (PLUS PM)

DigiPlus (PLUS PM): Brazil License And CasinoPlus Acquisition Game Changing Catalysts For The Future

We summarize/analyze two huge catalysts for Digiplus Interactive (PLUS PM) that we learned about on the PSE Investor Day call: obtaining the a)...

Sameer Taneja

DigiPlus Interactive Corp (PLUS PM): Solid Q3 2024, Enter the Peak Q4 Season

We summarize Digiplus Interactive Corp (PLUS PM) 's Q3 2024 result. Trading at 8.2/6.4x FY24/25 PE, with 15% of the market cap in cash and a 5%...

Sameer Taneja