CNVRG reported top-line growth of 33.2% to PHP 8.3 billion in 2Q22 due to continued growth from its residential (+34% YoY) and enterprise businesses (+26% YoY). This was partially offset by an increase in costs relating to its expanded network and improved customer service, as the company ramps up operations. In addition, CNVRG noted a jump in promotion and finance related costs. This resulted in only a 16% growth in net income to PHP 2 billion for the quarter.<\/p>\n\n\n\n
Despite strong financial performance, it is worth noting that residential and enterprise customer growth continues to slowdown, growing 1% and 7%, respectively in 2Q22 vs. the 7% and 14% growth seen in 1Q22. This is despite aggressive subscriber acquisition strategies, such as removing upfront fees, which proved ineffective. The company had lower gross additions of 150k (20% lower QoQ) and a higher churn rate of 2.5% (vs. only 1.5% the previous quarter).<\/p>\n\n\n\n
Our view:<\/strong> CNVRG’s growth story is already priced-in. The slowdown in growth for both residential and enterprise businesses of CNVRG tell us that its once attractive and exciting growth story may now come to a close. While still showing strong figures, we feel that with current growth drivers, the company is fairly valued at its current price.<\/p>\n","protected":false},"excerpt":{"rendered":" Here’s a commentary on an important issue or event affecting the stock market <\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-316528","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=316528"}],"version-history":[{"count":2,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316528\/revisions"}],"predecessor-version":[{"id":320488,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/316528\/revisions\/320488"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=316528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=316528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=316528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}