BUY: TP ₱1,899.

00
ARENILLO, ALYSSA MARIE A.
SISON, MA. AIRA JOY F.
FMGT2A

GLO
I. ECONOMIC, INDUSTRY, AND STRUCTURAL LINKS
According to PSA, the country's GDP grew year-on-year by 5.5% in the second quarter of 2019. Aside from factors like Fishing,
Mining, Manufacturing, one of the drivers of this growth is the Communication services and Globe Telecommunications, Inc. is
considered as one of the biggest companies under that industry. Due to that positive GDP rate, Globe posted favourable results with
consolidated revenues climbing to ₱158.45B because as the infrastructure program continues here in the Philippines, the need for
telecommunication resources also increases. Additionally, all of the business here in the Philippines tends to use the internet and
mobile phones for marketing and other purposes that is why their company has a good performance for the past years.

II. COMPANY ANALYSIS

Globe Telecom, Inc. is a provider of telecommunications services to individuals, small and medium-sized businesses, and
corporates and enterprises in the Philippines. The company operates the mobile, fixed- line and broadband networks in the country.
Under the mobile business segment, its well-known brands are Globe Postpaid as well as Globe and TM prepaid brands.
Additionally, it also provides its subscribers with mobile payment and remittance services under the GCash brand. While on its
fixed-line and broadband business segment, it offers a large of fixed-line communication services, wired and wireless broadband
access and an end to end connectivity solutions. The company’s principal shareholders are Ayala Corporation and Singapore
Telecommunications and has market capitalization of ₱253,081,263,500.00 as of Aug. 23, 2019.

The figure below shows the fundamental and technical analysis of the company. It indicates the earnings per share, support and
resistance level, as well as the downtrend movement of the GLO.

FUNDAMENTAL ANALYSIS (AS OF AUGUST 23, 2019)

Earnings per Share TTM (EPS): ₱151.40
52- Week high: ₱2,380.00 Price to Book Value (P/VP): 3.71
(22.86%)
52- Week low: ₱1,690.00 Price-Earnings Ratio TTM (P/E): ₱12.55 Return on Equity (ROE): 24.79%
Fair Value: - Dividends Per Share (DPS):
TECHNICAL ANALYSIS (AS OF AUGUST 23, 2019)
Support 1: ₱1,890.00 Resistance 1: ₱1,980.00 Short-Term Trend: ↓Downtrend
Support 2: ₱1,794.50 Resistance 2: ₱2,260.00 Medium-Term Trend: ↓Downtrend
Week to Date %: -0.84% Year to Date %: -0.05% Month to Date %: -11.59%

III. INTRINSIC VALUE ( AS OF JANUARY 2019- AUGUST 2019)

DATE LAST % NET

CHANGE OPEN LOW HIGH VOLUME
(2019) PRICE CHANGE FOREIGN
Aug. 23, 2019 ₱1,899.00 -1.00 -0.05% ₱1,890.00 ₱1,890.00 ₱1,900.00 47.53K 1.51B
Jul. 23, 2019 ₱2,180.00 -36.00 -1.62% ₱2,180.00 ₱2,180.00 ₱2,214.00 17.36K -10.67B
Jun. 24, 2019 ₱2,208.00 -22.00 -0.99% ₱2,218.00 ₱2,182.00 ₱2,230.00 37.32K -6.41M
May 23, 2019 ₱2,100.00 -50.00 -2.33% ₱2,100.00 ₱2,090.00 ₱2,150.00 94.2K 28.62M
April 23, 2019 ₱1,830.00 -48.00 -2.56% ₱1,860.00 ₱1,830.00 ₱1,864.00 51.43K 14.55M
Mar. 22, 2019 ₱1,996.00 24.00 1.22% ₱1,972.00 ₱1,951.00 ₱1,996.00 23.97K 23.9M
Feb. 22, 2019 ₱1,901.00 11.00 0.58% ₱1,899.00 ₱1,899.00 ₱1,907.00 19.35K 2.92M
Jan. 23, 2019 ₱2,100.00 14.00 0.67% ₱2,080.00 ₱2,052.00 ₱2,094.00 21.86K 21.05M
(Historical data from Aug. 2018- July 2019)

(Graphical representation of Globe

Telecommunications, Inc. from
January 2019- August 2019)

This graph shows the price movement

of GLO with the last trading price of
₱1,899.00. Bollinger Bands and
Stochastic are the indicators that were
used. As you can see, starting in the
last week of July up to August, the
stock price results in fall.

GLOBE TELECOMMUNICATIONS, INC.

 BUY: TP ₱1,899.00
ARENILLO, ALYSSA MARIE A.
SISON, MA. AIRA JOY F.
FMGT2A

GLO
IV. COMPETITIVE SRATEGIES
SWOT ANALYSIS
STRENGTHS WEAKNESSES
 Wider coverage of internet connection  Have a poor quality of signal reception provided to its
 Profitability customers.
 Strong brand identity  Poor customer service
 Late adaption of latest technology
OPPORTUNITIES THREATS
 Acquisition of high-quality technology equips Globe  Intense Competition
Telecom to provide better internet service.  Government Regulations
 Increasing demand for internet services and network
expansion.
 Improving its broadband net services on rural areas.

V. COMPANY EARNINGS
The figure below shows the 3 Year estimated Annual Income of Globe Telecommunications, Inc.
Fiscal Period Actuals in M PHP Estimates in M PHP
December 2016 2017 2018 2019 (e) 2020 (e) 2021 (e)
Sales 119 990 127 906 132 875 163 216 171 547 178 903
EBITDA 49 978 53 326 65 127 74 898 77 021 78 315
Operating Profit (EBIT) 26 129 25 813 34 705 41 101 39 821 37 948
Pre-Tax Profit ( EBT) 21 937 21 542 27 613 32 590 32 621 30 380
Net Income 15 878 15 084 18 626 22 091 22 173 20 647
P/E Ratio - - - 11, 3x 11, 2x 11, 5x
EPS (PHP) 115 109 135 168 170 165
Dividend Per Share (PHP) 88,0 91,0 91,0 94,3 100 102
Yield - - - 4,96% 5, 29% 5, 39%
Reference Price (PHP) - - - 1 900,000 1 900,000 1 900,000
Announcement Date 02/08/2017 02/05/2018 02/11/2019
- - -
07:41 am 12:00 am 11:25 pm

VI. GROWTH ANALYSIS

Globe Telecom is still growing because of its strong consolidated service revenue and now a leading mobile provider in terms of
overall subscribers. For the first three months of 2019, Globe spends around 68% of the total expenditures for data-related services. It is
now reaping the benefits of its modernized 4G/LTE network that allows more of its customers to experience faster internet connection,
thus the mobile data traffic growth from 180 petabytes in the same period of 2018 to 370 petabytes this period. Yearly, Globe Telecom has
increased the revenue of P2.7 billion last year up to this year. Additionally, Globe signs MOU with ISOC Infrastracture, Inc. and Malaysia-
based tower giant edotco Group Sdn. Bhd., becoming the first telco to support the common tower initiative of the Department of
Information and Communications Technology (DICT).

VII. WHEN TO SELL OR BUY

Globe Telecom has been downtrend since the beginning of August 2019 and based on the RSI and other indicators, it was believed
that the stock price will continuously fall (bearish) so if someone would like to buy, the researchers suggest that they should wait for GLO
to reach a stable base first and has stopped from dropping because there is a risk since we are not sure yet if the stock will still go down
further. It is good to buy a stock at a cheaper price but not while they are dropping. On the other hand, if someone wants to sell the stock,
it should be based on data and analysis rather than emotion. It is a good sale if it will result in profit and it does not necessarily mean that
you will wait for the absolute price before selling it because it can be seen in the graph that the stock price changes dramatically in a short
period of time.

VIII. INFLUENCE ANALYST

The researchers recommend aspiring investors to put up their money on investing to Globe Telecommunications, Inc. for the reasons:
 GLO has been generating positive cash flows for the last 20 years. Its operating cash flows represent about 37 percent of its
annual revenues. Its operating cash flows have been growing by nine percent every year since 2010.
 GLO has one of the highest returns on equity in the market, averaging 23 percent for the past ten years.
 The total number of mobile subscribers of GLO has increased by 9 percent to 65 million to date, where 54 percent are mobile
data users. Improving revenue growth from data-related businesses in the next twelve months should sustain GLO’s earnings
growth recovery.

GLOBE TELECOMMUNICATIONS, INC.