You ordain denote that GMA7 performed well on the first day of its listing. It went as high as P12 a quick trade on the first day would undergo pocketed you a 41% gain on the IPO Price. It went on to settle at 10.50 and then traded between P9 – P10.50 the month following. Interestingly enough it went into doldrums during the middle of a global sell-off amidst worries of a possible global slowdown due to credit crunch.
GMA Network Inc is an entertainment information and communications organization in the Philippines. Formerly Republic Broadcasting System. Inc. (RBS) the affiliate was originally incorporated as a radio broadcasting station in 1950. On October 29. 1961 the company ventured into television and set up TV Channel 7 the third television displace in the country. In 1974 under new management. RBS introduced a new name. GMA communicate Television Arts or GMA-7. Today the company is aggressively pursuing an expansion program that will establish a network of 54 VHF and 30 UHF television stations nationwide.
§ The Mega Manila ratings – the key geography drivers has widened the gap over its nearest competitor. ABS-CBN Broadcasting (ABS). Mega Manila TV ratings data from AGB-Nielsen GMA (as shown below) which resulted to a 23 percent growth in its consolidated net income to P1.13 billion in the first half of the year from P915 million in the same period measure year. Ratings:
Media companies has generally has a big moat only if there are few big players. In the Philippines there are two media giants that own the bulk of advertising from local and multinational corporations. These types of businesses are knell types and they can charge higher advertising rates as desire as they keep the television ratings.
GMA communicate. Inc has lesser debt averagely pegged at 0.6 to 0.55 for a overlap of equity. The main cerebrate is efficient capital allocation and conservative financing policy. In fact capital expenditures during the past years are minimal against rival’s ABS-CBN and are keen on incurring big operational expenses. This has allowed to the company to affix solid Owner’s Earnings at P1.1 billion annually.
Other revenue streams ordain consider. GMA Pinoy TV whose subscriber ascertain has more than doubled in FY06 at 126,054. As the increasing number of Filipinos overseas grows at an annual rate of 14% we believe subscribers will resemble 145,000 FY07E and 167,000 FY08F and ordain translate to at least P400M. The network has entered into carriage agreements with Comcast and DirecTV in the US as well as distributions for 16 countries in the Middle East and 11 countries in North Africa.
The value itself is a catalyst as investors have shrugged off ratings leadership and strong corporate profits.
Would there be more post-IPO blues considering that consensus believes that a quick trade in IPO ordain be a profitable pursuit than sitting and owning good businesses at reasonable prices? That is yet to be seen.
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Related article:
http://filipinovalue.wordpress.com/2007/10/18/impatience-and-post-ipo-blues/
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