In the dynamic world of gambling stocks, DigiPlus Interactive Corp. stands out with a remarkable 151% increase in its share value this year. This surge has positioned it as the most significant gainer among casino stocks with a market capitalization exceeding $1 billion. Over the past two years, DigiPlus’s stock has skyrocketed twelvefold, a meteoric rise fueled by the company’s strategic pivot to online gaming during the pandemic.
A Record-Setting Performance
On Wednesday, DigiPlus’s shares closed 5.2% higher, edging close to a new all-time high. This impressive performance is set against a backdrop of global scrutiny surrounding the impact of online gambling. Recent regulatory changes in the Philippines, including a ban on offshore gambling operations catering to Chinese gamblers, have sparked concerns about the industry’s social implications, such as money laundering and other related crimes.
Domestic Online Gaming Boom
DigiPlus, formerly known as Leisure & Resorts World Corp., has capitalized on the burgeoning domestic online gaming market in the Philippines. The company’s revenue from online gaming surged by a staggering 525% in the latest quarter compared to the previous year. This growth is attributed to DigiPlus’s strategic shift from bingo halls to targeting tech-savvy younger audiences with disposable income.
Gabryle Aguila, head of equity research at Unicapital Securities Inc., highlights the sustainability of DigiPlus’s growth trajectory. “The company’s move into the digital space has been executed with great precision, helping build a brand with decades of awareness,” Aguila remarked.
Financial Strength and Market Position
DigiPlus’s financial performance has further amplified its stock appeal. The company reported a remarkable 400% increase in net income for the second quarter, reaching 3.2 billion pesos ($57 million). This is more than double the profit reported by Bloomberry Resorts Corp., a major player in the Philippine brick-and-mortar casino sector.
Despite concerns over potential local online gambling regulations, DigiPlus has maintained that it remains unaffected by the recent offshore ban. The company is also exploring international expansion, having applied for a gaming license in Brazil to diversify its market presence.
Stock Outlook and Investor Sentiment
The stock is currently trading at 6.2 times estimated forward earnings, below its five-year average of 7.4 times. It holds three buy ratings with no holds or sells, suggesting a 19% potential rise over the next year based on average price targets. Analysts, including Aguila, predict that the company’s strong financial performance will support continued gains in the latter half of the year.
“DigiPlus is undoubtedly on a strong growth trajectory, continuously reinforcing its stock price with solid fundamentals,” Aguila added. This optimistic outlook underscores the company’s robust position in the online gambling market and its potential for future expansion.