Globe Telecom rises on GCash service expansion overseas, earnings report

GLOBE Telecom, Inc. was one of the most actively traded stocks last week after the announcement of its electronic payment platform’s overseas expansion and the release of its full-year financial report.

Data from the Philippine Stock Exchange (PSE) showed a total of P1.26 billion worth of 631,685 shares were traded from Feb. 13-17, making it the fourth most actively traded stock in the local bourse last week.

The Ayala-led telecommunication company closed at P2,040 per share on Friday, increasing by 1.2% from the P2,016 closing price on Feb. 10. So far this year, the stock has declined by 6.4%.

Ryan Vincent L. Parlade, equity analyst at The First Resources Management and Securities Corp., said the stock’s growth was mainly due to the overseas service expansion of e-wallet GCash.

“The stock’s movement for the week is mainly driven by a technical bounce caused by the recent sell-down in the stock this past couple of days driven by its exclusion in the MSCI index and ex-dividend date of the stock. Furthermore, the recent news with regard to Globe’s GCash service expansion in Japan, Australia, and Italy buoyed investor sentiment,” Mr. Parlade said in an e-mail.

In a statement on Thursday, GCash announced that it had received a go signal from the Bangko Sentral ng Pilipinas to start its beta launch of the e-wallet overseas, providing service to Filipinos in Japan, Australia, and Italy with an international SIM card.

G-Xchange, Inc., a subsidiary of Globe Fintech Innovations, Inc., or Mynt, said the approval of the beta launch of GCash Overseas will make it the first and only e-wallet in the Philippines to have this capability.

The beta mode of GCash Overseas is expected to run for a limited time only. However, it is set to fully launch later this year. The beta launch will only be accepting the first 1,000 users from the said countries with an international SIM card.

Mr. Parlade also noted that market players should consider looking at the company’s targets.

“In addition, the stock is also trading at a discount with a price-to-earnings of 8.20x, lower than its 5-year historical price-to-earning of 13.70x,” he added.

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan cited the stock company’s recent guidelines as a main driver for last week’s trading performance.

“Globe’s performance for this week was primarily influenced by the guidance which was provided during their fourth quarter and full-year briefing. One of the issues adding concern to investors is how the SIM Registration law would affect its mobile subscriber count and likewise, its churn rates,” Mr. Limlingan said.

In a press release, Globe said that while the SIM card registration is expected to result in a lower subscriber base for the company, it assured the public that they do not expect any impact on its financial performance.

Its consolidated bottom line rose by 46% P34.60 billion, from P23.72 billion in 2021.

Meanwhile, Globe’s top line inched by 4% to P157.98 billion last year from P152.26 billion previously.

Mr. Limlingan expressed optimism about the telco company’s revenue.

“The single-digit top-line expansion is likely to be sustained for this year, buoyed by the assumption that the currently enjoyed traction of its corporate business is maintained,” he said.

He placed Globe’s first resistance at P2,080 while estimating a more reliable resistance at P2,170. For support levels, he pegged P1,970 for the stock.

“We are currently looking at the P2,000 psychological level as strong support for Globe followed by the 1,950.00 level. On the other hand, we are placing our resistance levels at the P2,080 gap and the P2,200 level,” Mr. Parlade added.

He expects Globe’s net income to reach P7.63 billion to P7.83 billion this year. — M. I. U. Catilogo