FREE Stock in Focus: ABS-CBN Corp. (ABS) – 20 Feb 2025 by AP Securities

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Summary of Broker’s Recommendation

ABS-CBN started the 1st quarter (1Q) 2025 with a bang, with estimated revenues from BINI’s Philippine Arena concert estimated to have generated at least P353.63 Million from ticket sales alone—almost 10% of ABS content production revenues in the same period last year. Moreover, this has yet to factor in ABS’ other achievements such as “Hello, Love, Again” film’s P1.4-Billion hit and BINI’s key contributions such as short performances, endorsement deals with brands like JFC, PGOLD, Shopee, Penshoppe, Coke Studios and revenues from Youtube content creation.

While there has been a lot of buzz around ABS and political moves to renew its broadcasting franchise, we are not optimistic that this will push through. Instead, our optimism on ABS hinges on its potential to fully evolve into a content creation company and eventually reach profitability through this new business model.

As ABS starts to demonstrate its ability to generate revenues as a content creation company, we reiterate our BUY rating on the company with a Target Price of P5.44/share.

Analysis and Opinion

Philippine Arena sold out

Bini is said to be the first Filipino act that sold-out a solo concert at the world’s largest indoor arena. ABS’ Bini, “the Nation’s Girl Group,” recently sold out the 55,000-seat venue, which we estimate to have generated around P353.63-Million in ticket sales for the whole concert.

Additionally, the scale is more significant if compared to our last year’s estimates of P36.0-Million in revenues from BINIverse concerts in New Frontier Theater and Araneta Coliseum which had smaller seat capacities of 2,325 and 9,513 respectively. With the blooming success, ABS has hit more than just the jackpot; instead, they have carefully and steadily struck towards the gold mine.

Free cash flow (FCF) positive in 2024

ABS President Carlo Katigbak still expressed his optimism on the company’s turnaround as they aim to reach positive FCF by 2024. In 9-months (9M) 2024, FCF increased by +113.33% to P132.56-Million from year-end 2024’s -P994.27 Million. Although far from its franchise numbers, its 9M 2024 content production revenues rose by +9.98% to P9.66-Billion year-on-year (YoY) from P8.79-Billion in 9M 2023 which underpins our previous statement that ABS is in full bloom as a content creation company.

BINI on the international stage

After its local success, we see ABS trying out the international scene as they hold a “BINIverse World Tour” in Singapore, Dubai, London, and the United States of America which brings them one-step closer to KPop’s popularity in recent years.

As such, the company is experimenting with the group’s rhythms to see which would catch international attention by collaborating with international songwriters who composed songs for Ariana Grande, BTS, Twice, BLACKPINK, Le Sserafim, aespa, ZAYN, Dua Lipa and numerous others that topped Billboard and Spotify Charts. Moving forward, a potential success on the international stage can help bring ABS production value to greater heights and possibly translate to higher revenues.

NOTE: This is a Premium-exclusive stock report, originally for our Premium Access members, but we’re giving this to you free! To view other FREE stock reports, just click here. To get full access to all Premium-exclusive reports, simply upgrade to Premium Access today for as low as P399.00 a month!

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