Core Viewpoint - The article emphasizes the importance of value investing and highlights PLDT (PHI) as a strong candidate for value investors due to its attractive valuation metrics and earnings outlook [2][4][6]. Company Analysis - PLDT (PHI) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock's Forward P/E ratio is 7.29, significantly lower than the industry's average of 10.40, suggesting it may be undervalued [4]. - Over the past year, PHI's Forward P/E has fluctuated between a high of 10.14 and a low of 7.06, with a median of 8.49 [4]. Cash Flow Metrics - PLDT has a P/CF ratio of 2.92, which is attractive compared to the industry's average P/CF of 4.43, indicating a favorable cash outlook [5]. - The P/CF ratio for PHI has ranged from a high of 4.05 to a low of 2.88 over the past year, with a median of 3.34 [5]. Investment Outlook - The combination of low valuation metrics and a strong earnings outlook positions PLDT as one of the market's strongest value stocks [6].

Group 1 - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets [1] - Investment diversification has become a strategy for individuals, moving away from traditional savings in banks and properties [1] - The popularity of insurance companies in the Philippines has influenced investment choices since 2014 [1] Group 2 - Initial investments were made in blue-chip companies, but there is now a broader portfolio across various industries and market capitalizations [1] - The US market was entered in 2020, expanding investment opportunities beyond the Philippine market [1] - The use of analytical tools and resources, such as Seeking Alpha, has enhanced comparative analysis between the US and Philippine markets [1]

Core Insights - The article emphasizes the importance of a proven ranking system that focuses on earnings estimates and revisions to identify winning stocks [1] - Value investing is highlighted as a popular and successful strategy across various market conditions, relying on traditional analysis of key valuation metrics [2] - The Zacks Rank and Style Scores system are tools for investors to identify high-quality value stocks, particularly those with high Zacks Ranks and "A" grades for Value [3] Company Analysis: PLDT (PHI) - PLDT (PHI) is currently rated with a Zacks Rank of 2 (Buy) and an A for Value, indicating strong investor interest [4] - The stock has a P/E ratio of 7.83, which is lower than the industry average of 9.36, suggesting it may be undervalued [4] - Over the past 52 weeks, PHI's Forward P/E has fluctuated between 10.14 and 7.06, with a median of 8.55 [4] - PHI's P/CF ratio stands at 3.22, which is attractive compared to the industry's average P/CF of 4.21, indicating solid cash flow prospects [5] - The P/CF ratio for PHI has ranged from 4.05 to 2.88 over the past year, with a median of 3.37 [5] - These metrics contribute to the strong Value grade for PLDT, suggesting it is likely undervalued and has a positive earnings outlook [6]

Financial Performance - Adjusted EBITDA is monitored by management for each business unit separately, and it is presented as a key performance indicator to assist investors in analyzing the performance of PLDT[35]. - Core income for PLDT is defined as net income attributable to equity holders, excluding certain non-recurring items, and is used for resource allocation and performance assessment[36]. - Telco core income is adjusted for specific losses and is a basis for determining dividend payouts to shareholders[37]. - The company reported total revenues of Php216,833 million (approximately US$3,748 million) and a net income of Php32,307 million (approximately US$558 million) for the year ended December 31, 2024[156]. Dividends - Total dividends declared for 2023 amounted to Php 20,525 million, with a per share dividend of Php 95[41]. - The company declared a total of Php 28,951 million in dividends for 2022, with a per share dividend of Php 134[41]. - In 2024, PLDT plans to declare dividends totaling Php 20,958 million, with a per share dividend of Php 97[41]. Market Competition - The company faces increased competition in the telecommunications sector, which may impact market share and profitability[46]. - The mobile telecommunications industry is experiencing intense price competition, particularly in data services, affecting customer experience and pricing strategies[47]. - Regulatory changes, such as the amendment to the Public Service Act, may increase competition and impact customer retention[48]. - The amendment to the Public Service Act allows for increased foreign investment but may also enable competition from foreign telecommunications companies[67]. - In 2022, the amendment to the Public Service Act removed the 40% foreign ownership restriction on telecommunications companies, increasing competition[83]. Technology and Innovation - The company is actively integrating AI into its operations, starting with a smart voice AI solution to enhance payment collections and improve employee productivity[55]. - The Philippine government is developing regulations for AI technologies, which may impose obligations and costs related to monitoring and compliance[56]. - The introduction of new prepaid eSIMs and digital delivery of eSIMs in 2023 supports the growth of mobile services, enhancing customer experience and engagement[181]. Infrastructure and Investments - The company has entered into agreements with vendors to upgrade and modernize significant portions of its IT infrastructure, but completion on schedule is not guaranteed[60]. - The company secured Php1.0 billion and Php4.0 billion Green Loan Facilities to fund the modernization and expansion of its fiber network, aiming to reduce greenhouse gas emissions by 40% by 2030[160]. - A Php2.0 billion Social Loan Facility was obtained to expand network fiber to underserved municipalities, aligning with government connectivity initiatives[161]. - The company invested Php840 million in Kayana, representing a 60% equity interest, to enhance digitalization initiatives within the MVP Group[163]. - On April 30, 2024, the company invested Php2,116 million for a 34.9% equity interest in Radius Telecom, Inc. to enhance market share[165]. - The company increased its ownership in MIH from 36.97% to 37.66% through a US$15.3 million investment in convertible preferred shares[166]. - The company sold a 4.99% equity interest in Multisys for Php270 million, retaining a 45.73% interest and continuing to consolidate its financial results[167]. Customer Base and Services - As of December 31, 2024, the company served 66.6 million users across mobile, fixed line, and data services[154]. - The total mobile subscriber base reached 58,989,807 as of December 31, 2024, reflecting a growth of 2% in prepaid subscribers and 5% in postpaid subscribers compared to the previous year[176][177]. - Mobile data services accounted for 89% of the wireless consumer segment revenues, with mobile internet revenues increasing by Php3,793 million, or 5%, to Php75,061 million from Php71,268 million in 2023[169][178]. - PLDT Home serves 3.3 million subscribers nationwide as of December 31, 2024, positioning itself as the leading home broadband service provider in the Philippines[204]. Operational Challenges - The company faces declining revenues from traditional services due to the growing use of mobile data and competition from alternative technologies[52]. - Limitations in frequency spectrum availability could negatively impact service quality and competitiveness, affecting customer retention[94][95]. - Cybersecurity threats pose significant risks to operations, with potential legal and financial repercussions from successful attacks[107]. - The company faces challenges in timely installation and maintenance of telecommunications facilities, which could adversely affect market share and service quality[101][102]. - Compliance with varying international data protection regulations may incur substantial costs and impact business practices[91]. Financial Risks - The company has significant internal cash requirements for debt service, capital expenditures, and operating expenses, which may limit its ability to pay dividends to the parent company[122]. - The company is vulnerable to fluctuations in the Philippine peso against the U.S. dollar, which could increase its U.S. dollar-denominated obligations[115]. - The company may incur significant costs due to potential new environmental legislation and regulations introduced by the Philippine Government[110]. - The company faces risks from climate change, which could increase the frequency and severity of natural disasters, impacting operations and supply chains[108]. - The company may face difficulties in funding capital expenditures if it cannot secure financing on acceptable terms[112]. Governance and Legal Matters - The company is involved in various legal proceedings that may materially impact its financial condition and operating results[135]. - Smart received a subpoena from the PCC Competition Enforcement Office related to an ongoing investigation in the telecommunications industry, submitting relevant corporate documents[82]. - House Bill 9021 mandates refunds for internet service outages lasting 24 hours or more, requiring significant operational adjustments for compliance[84][86]. - House Bill 10289 institutionalizes a roll-over data allocation scheme for ISPs, necessitating substantial capital and operational expenditures for compliance[87]. - The KP Act, if enacted, will liberalize the telecommunications sector by removing legislative franchise requirements, potentially reshaping market dynamics[88]. Strategic Partnerships - PLDT's strategic partnerships with institutional investors like First Pacific and NTT DOCOMO enhance its market position and product offerings[171]. - Smart enhances PLDT Enterprise's portfolio with IoT solutions, driving operational efficiency through advanced analytics and connected devices[227].

Core Insights - The article emphasizes the importance of a ranking system based on earnings estimates and revisions to identify winning stocks, while also acknowledging the diverse strategies investors may adopt [1] - Value investing is highlighted as a particularly popular and successful strategy across various market conditions, utilizing established valuation metrics [2] - The Zacks Style Scores system is introduced, with a focus on the "Value" category, where stocks with "A" grades and high Zacks Ranks are considered top value stocks [3] Company Analysis: PLDT (PHI) - PLDT (PHI) is currently rated with a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating strong potential for value investors [4] - The stock's P/E ratio stands at 7.89, which is lower than the industry average of 9.04, suggesting it may be undervalued [4] - PHI's Forward P/E has fluctuated between 10.14 and 7.06 over the past year, with a median of 8.55, further supporting its valuation appeal [4] - The P/CF ratio for PHI is 3.23, which is attractive compared to the industry average of 4.12, indicating solid cash flow relative to its valuation [5] - Over the past 52 weeks, PHI's P/CF has ranged from 2.88 to 4.05, with a median of 3.37, reinforcing its undervaluation perspective [5] - Overall, the metrics suggest that PLDT is likely undervalued, and its strong earnings outlook positions it as one of the market's strongest value stocks [6]

Financial Data and Key Metrics Changes - PLDT's service revenue grew by 2% year-on-year to PHP 194.7 billion, driven by Fiber Mobile data and Enterprise ICT [9] - Gross revenue rose by 3% to PHP 208.4 billion, with EBITDA expanding by 4% to PHP 108.5 billion [9][10] - EBITDA margin remained strong at 52%, indicating sustained profitability despite ongoing investments [10][19] - Telco Core income increased by 2% to PHP 35.1 billion, reflecting earnings stability [10][19] Business Line Data and Key Metrics Changes - Individual segment revenues rose by 2% to PHP 83.5 billion, with Mobile Data increasing by 5% year-on-year [12] - Home segment revenues reached PHP 60.7 billion, with Fiber-only revenues growing by 6% to PHP 56 billion [14] - Enterprise revenues grew by 3% to PHP 48.4 billion, with ICT services up 15% to PHP 35 billion [17] Market Data and Key Metrics Changes - Active data users reached 41.3 million, with average monthly mobile data usage per user growing by 5% [12] - PLDT's ARPU of PHP 1,488 remains above industry average, with over 75% of new activations opting for premium plans [15] Company Strategy and Development Direction - PLDT is focused on expanding revenues, managing costs, and improving cash flow generation in 2025 [10] - The company aims to leverage 5G expansion and AI-driven marketing strategies to enhance customer engagement and revenue generation [13][50] - PLDT is committed to sustainability, with a goal of running data centers on at least 40% renewable energy by 2030 [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and steady revenue growth despite competitive pressures [36] - The company is focused on cost efficiency while ensuring CapEx is directed towards high-impact areas [36] - Management indicated that they are not yet comfortable providing specific guidance for 2025 core income but expect increases in revenues and profitability [123] Other Important Information - PLDT's net debt-to-EBITDA stands at 2.52 times, with a target to reduce it to 2.0 times in the mid-term [23] - The company retained its investment-grade ratings from S&P and Moody's, reflecting prudent debt management [25] - Maya Bank has shown significant growth, with a customer base increase of 71% year-on-year to 5.4 million [28] Q&A Session Summary Question: What is PLDT's stance on the Konektadong Pinoy Act? - PLDT supports the government's effort to provide open access and requests equal treatment with data transmission providers [79][81] Question: What initiatives are driving customer retention in the Home segment? - PLDT Home focuses on competitive offers, increasing speeds, and improving service quality to maintain a low churn rate of 1.7% [92] Question: How did PLDT drive higher ARPU in Q4 while peers saw a decline? - PLDT achieved higher ARPU through improved sales and marketing infrastructure and effective 5G rollout [99] Question: What is the reason for subscriber losses in prepaid during Q4? - The decline was due to a year-end cleanup of subscribers [127] Question: Can you elaborate on the GPU-as-a-Service offering? - The GPU-as-a-Service offering is in early stages, with discussions ongoing with enterprises to explore use cases [132]

Financial Data and Key Metrics Changes - Service revenue grew 2% year-on-year to PHP 194.7 billion driven by Fiber Mobile data and Enterprise ICT [9] - Gross revenue rose by 3% to PHP 208.4 billion [9] - EBITDA expanded by 4% to PHP 108.5 billion, with an EBITDA margin of 52% [10][19] - Telco Core income increased by 2% to PHP 35.1 billion, reinforcing earnings stability [10][19] - Reported income surged 21% to PHP 32.3 billion, up PHP 5.7 billion year-on-year [20] Business Line Data and Key Metrics Changes - Individual segment revenues rose by 2% to PHP 83.5 billion, with Mobile Data up by 5% [12] - Home revenues hit PHP 60.7 billion, with Fiber-only revenues growing by 6% to PHP 56 billion [14] - Enterprise revenues grew 3% to PHP 48.4 billion, with ICT services up 15% to PHP 35 billion [17] Market Data and Key Metrics Changes - Active data users reached 41.3 million, with average monthly mobile data usage per user growing by 5% [12] - PLDT's ARPU of PHP 1,488 remains at a premium to the industry [15] - Maya Bank's customer base grew 71% year-on-year to 5.4 million [28] Company Strategy and Development Direction - Focus on expanding revenues, managing costs, and improving cash flow generation in 2025 [10] - Strategic investments in network leadership, AI-driven marketing, and digital transformation [36] - Commitment to sustainability with a target of running data centers on at least 40% renewable energy by 2030 [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining profitability amid competitive pressures [10] - Anticipated continued growth in mobile data and enterprise ICT segments [36] - Plans to enhance customer experience and retention through improved service and innovative offerings [92] Other Important Information - CapEx for 2024 totaled PHP 78.2 billion, with guidance for 2025 between PHP 68 billion and PHP 73 billion [21][22] - Net debt-to-EBITDA currently stands at 2.52 times, with a target to reduce it to 2.0 times in the mid-term [23] - PLDT retained investment-grade ratings from S&P and Moody's [25] Q&A Session Summary Question: What is PLDT's stand on the Konektadong Pinoy Act? - PLDT supports the government's effort to provide open access and requests equal treatment with data transmission providers [79][81] Question: What initiatives are driving customer retention in the Home segment? - PLDT Home focuses on competitive offers, increasing speeds, and improving service to maintain a low churn rate of 1.7% [92] Question: Can you clarify the 11% increase in Fixed Line from 2023 to 2024? - The increase is attributed to bundled products, with voice services growing as part of these bundles [115] Question: Any preliminary guidance for 2025? - Management is not comfortable providing specific guidance for core income for 2025 but expects increases in revenues and profitability [123] Question: Why did PLDT see subscriber losses on prepaid in the fourth quarter? - The losses were due to a year-end cleanup of subscribers [127] Question: What has demand been like for GPU-as-a-Service? - Demand is growing, and PLDT is in discussions with enterprises to explore use cases for this service [133]

Presentations Page (IR website) FY2024 Analysts Briefing 1 Financial Highlights Stable Expansion and Earnings Growth | | FY24 | FY23 | Change | % Change | | --- | --- | --- | --- | --- | | Service Revenues [net of interconnection costs] | 194.7bn | 191.4 | +3.3bn | +2% | | Cash Opex, Subsidies, Provisions (ex-MRP) | 86.1bn | 87.1bn | -1.0bn | -1% | | EBITDA (ex-MRP) | 108.5bn 52% margin | 104.3bn 52% margin | +4.2bn | +4% | | Depreciation & Amortization | 50.5bn | 46.9bn | +3.7bn | +8% | | EBIT | 58.0bn | 5 ...

APLDT & Smart | --- | --- | --- | --- | |-----------------------|-------|-------|-------| | | | | | | 12 th November 2024 | | | | (IR website) PLDT Group: Financial Highlights | --- | --- | --- | --- | |-------------------------------------------------|--------------------|--------------------|----------------| | (Php in bn) | 9M24 | 9M23 | 9M24 vs 9M23 | | Service Revenues (net of interconnection costs) | 144.9bn | 142.3bn | 2% +2.6bn | | Cash Opex, Subsidies, Provisions (ex-MRP) | 64.2bn | 63.9bn | +0.3bn ...

Core Insights - The article introduces Daniel Javier as a new contributing analyst for Seeking Alpha, inviting others to share their investment ideas for publication and potential earnings [1]. Group 1 - The logistics sector is highlighted as a focus area, with nearly two decades of experience noted [2]. - The analyst emphasizes a specialization in stock investing and macroeconomic analysis for almost a decade, particularly in ASEAN and NYSE/NASDAQ stocks [2]. - Key sectors of interest include banks, telecommunications, logistics, and hotels [2].