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Summary of Broker’s Recommendation
| Stock Code | PLUS |
| Company Name | DigiPlus Interactive Corp. |
| Broker | AP Securities |
| Opinion Issued on | 10 Oct 2024 |
| Recommendation | Buy |
| 1-Year Target Price | PHP 24.84 |
We are now getting more clarity on the financial impact of the companyâs prospective entry into Brazil, and thus we are reinstating our BUY rating on PLUS with a Target Price of P24.84.
Analysis and Opinion
PLUS gets provisional license to operate in Brazil
Digiplus Brazil Interactive Ltd., the Brazilian arm of PLUS, has received a provisional license to operate ArenaPlus in Brazil during the transition period ending on January 1, 2025. ArenaPlus is one of the 205 platforms owned by 93 companies that received authorization to operate. The company has previously said that they expect to
obtain a permanent license around the end of November.
Correction to misconceptions
One major misconception is that Brazil is an unpenetrated market. Sports betting has been legal, albeit unregulated, in the country since 2018. It is only now that the country is formalizing the framework for online betting, but the market is already well-saturated especially since after the boom in online gambling during the COVID-19 pandemic.
As such, PLUS will now have to go head-to-head with popular incumbents like BET365 and Betano, with 23% and 20% market share respectively. Notably, these two platforms also received a provisional license to operate during the transition period.
Itâs bigger in Brazil
A key point that cannot be understated is how massive the Brazilian market is. Its population is almost double than that of the Philippines, with an internet penetration of 86.6% vs 73.6% for the Philippines.
Further, a TGM Research survey conducted in 2022 found that 30% of respondents in Brazil have placed a bet on sporting events through online platforms at least once in the past 12 months. The same survey yielded a participation rate of only 21% for the Philippines.
Brazilian bettors also tend to place bets more frequently than Filipinos, with 52% of respondents betting at least once a week vs 36% for Filipinos while 94% bet at least once a month vs 80% for Filipinos.
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