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Game on!
Considering that BLOOM performed better than the overall sector and that it remains the largest player in Entertainment City, we maintain our BUY on the stock based on consensus Target Price (TP) of P14.17. However, we note that the company faces risks from the erosion of disposable income due to elevated prices, as well as potential downweighting on various indices due to the slight decrease in its public float.
We have a stronger conviction in our BUY on PLUS, as the company has proven that it can match the parabolic growth in its share price with equally parabolic net income growth. We also note that consensus TP for the name has jumped by 79.9% from P9.48 in end-December to the current TP of P17.05. This reflects improving outlook for the stock and further strengthens our conviction BUY on PLUS.
Industry GGR grows 18.6% to P81.7-Billion
Data from PAGCOR showed that the industry’s gross gaming revenues (GGR) reached P81.7-Billion, up by 18.6% from P68.9-Billion in the same period last year. This was despite an 8.6% decline in GGR from PAGCOR-operated casinos, and an 8.2% decline in GGR from licensed casinos in Entertainment City, Fiesta, Clark, and Greenfield Zone. PAGCOR casinos reported a GGR of P4.7-Billion while licensed casinos fetched P49.7-Billion. Revenues from bingo operations also slumped by 21.5% to P4.8-Billion. The sole source of growth was the E-games segment, which registered a whopping 541.3% growth year-on-year (YoY) and delivered P22.5-Billion in revenues.
No surprises there
BLOOM, the operator of Solaire, and the now-delisted PLC, operator of City of Dreams Manila, have already reported their 1Q 2024 earnings. BLOOM reported a 5.0% decline in gaming revenues to P10.3-Billion, which was better than the 8.2% decline in licensed casino GGRs, while PLC reported that its share in CODM revenues plunged by 43.9% to P401.2-Million. Both casino operators blamed lower VIP rolling chip and mass table drop volumes for the decline.
Let’s get digital
PLUS’s 1Q 2024 earnings also came in last week and the company reported that
revenues from its retail segment, which includes bingo and e-games operations, grew by 237.2% to P13.4-Billion. This far outpaced the 183.4% growth of combined GGRs from bingo and e-games, and PLUS accounted for a staggering 40.9% of this combined total. The company credited sustained increases in user count and new product offerings for this extraordinary growth, which led to a 357.6% surge in net income after taxes.
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