{"id":332256,"date":"2025-04-22T00:05:00","date_gmt":"2025-04-21T16:05:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=332256"},"modified":"2025-04-21T23:16:30","modified_gmt":"2025-04-21T15:16:30","slug":"stock-in-focus-abs-cbn-corp-abs-22-april-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-abs-cbn-corp-abs-22-april-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: ABS-CBN Corp. (ABS) – 22 April 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>ABS<\/td><\/tr>
Company Name<\/strong><\/td>ABS-CBN Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>22 April 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 5.44<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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The removal of ABS from the airwaves, in a way, accelerated its shift to digital, as voiewers shifted to digital media platforms and on-demand streaming services for news and entertainment. Consequently, businesses and even politicians are now more likely to advertise on YouTube and Facebook rather than on TV and radio. One could almost say that the loss of its franchise was a blessing in disguise for ABS as it
forced the network to adapt to the changing trends, while GMA7 is left to dominate the deserted landscape of traditional media. ABS\u2019 well-established presence on YouTube and Facebook now gives it an edge against GMA7 in the race for digital dominance, as can be seen in the revenue numbers. <\/p>\n\n\n\n

With this in mind, we reiterate our BUY rating on ABS with a TP of P5.44\/share as we remain optimistic that it will eventually reach profitability as a content creation company.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

ABS sees consumer revenue growth<\/strong><\/p>\n\n\n\n

ABS-CBN and GMA7 both experienced a -6% year-on-year (YoY) decline in consolidated revenues, with ABS taking a -25% hit on consumer sales (cable TV & broadband) as subscription services sees weaker demand. On the other hand, GMA7 still saw disappointing declines across all segments: advertising (-5.5% YoY), content production & distribution (-1.5% YoY), and consumer sales (-8.9% YoY) despite the 4Q24 boost in midterm elections.<\/p>\n\n\n\n

A closer look at ABS\u2019 revenues<\/strong><\/p>\n\n\n\n

Even though GMA7 had the advantage of a broadcasting franchise, its advertising revenues continued to decline while ABS\u2019 advertising revenue was relatively flat (-0.3% YoY) at P6.7-Billion. ABS also saw robust +14.3% YoY growth in its 2024 content production & distribution segment compared to the GMA7\u2019s -1.5% YoY decline. The growth of content production was mainly attributed to the strong demand for music, films, and events which was pushed by sold-out BINI concerts, ASAP California, and the blockbuster hit \u201cHello, Love, Again\u201d, which was jointly produced with GMA7.<\/p>\n\n\n\n

Revenue distribution<\/strong><\/p>\n\n\n\n

On a wider scope, ABS\u2019 revenue distribution actually seems balanced with its topline being equally influenced by all three segments. In contrast, GMA7 is more reliant on advertising which makes up 92.5% of its consolidated revenues. This make GMA7 more vulnerable to the ongoing trend of advertisers shifting from traditional media to digital channels and social networking sites to reach consumers.<\/p>\n\n\n\n

The forever lost treasure<\/strong><\/p>\n\n\n\n

GMA7\u2019s revenues barely got a boost after the non-renewal of its rival\u2019s franchise in 2020, illustrating that the network failed to capitalize on the opportunity presented by the situation. To make matters worse, GMA7\u2019s topline continued to decline from its peak in 2021 and is now at almost the same level as ABS. It is now increasingly likely that ABS\u2019 pre-2020 revenues are unattainable for GMA7 given the broad shift in advertising trends to digital channels.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>