DigiPlus 'exploring opportunities' in Brazil
![DigiPlus 'exploring opportunities' in Brazil](https://media.philstar.com/photos/2021/11/17/stock-commentarymb_2021-11-17_08-59-59.jpg)
DigiPlus [PLUS 20.10, up 5.2%; 89% avgVol] [link] put out a press release to say that it is “exploring opportunities” in Brazil’s digital gaming space “following the recent legalization of gaming and betting activities in the country.” As PLUS points out, Brazil has a population of over 200 million with 87% internet penetration. For comparison, the Philippines has a population of approximately 110 million with an internet penetration of 53% (2021). PLUS said that it has applied to Brazil’s PAGCOR equivalent for a federal license, and expects to hear back on the success of its application by November of this year. The company said that it is looking to “diversify its portfolio into new markets”, but that it “envisions the Philippines to remain its core market.”
MB BOTTOM-LINE: Seems like PLUS can do nothing wrong. Even its world domination plans seem like they’re the right combination of aggressive and selective. For a digital company like PLUS, it would be tantalizingly easy for the management team to make noises inferring the entire world as its potential addressable market, but that wouldn’t be all that accurate (gaming is heavily regulated in most countries) and it would make me feel like the team lacked focus and measurable deliverables. Instead, the management team has made its push into international business a targeted affair, concentrated on just one country that is now going through a similar regulatory evolution that PLUS successfully navigated here in the Philippines. I’m not saying that this is an automatic swish, but from the outside (as someone who has no functional knowledge of Brazil’s gaming landscape) it looks like PLUS is making good decisions with the ball. To continue abusing this basketball metaphor, PLUS has (so far) demonstrated great shot selection. A company has only a limited supply of money and attention, and its success is dictated by how efficiently it converts those assets into profit for shareholders. This seems like a well-calibrated move to leverage an efficient amount of both resources into future profits for PLUS’s shareholders, who must have their fingers crossed for this November decision by Brazil’s gaming authority.
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