ABS-CBN Corporation (ABS): A Buy on Bad News?

ABS-CBN Corporation (ABS) announced today that it has ended its partnership with Globe.

The partnership started in 2013 for a five-year service agreement to deliver content and telecom services on mobile service utilizing the ABS-CBN mobile brand.

Furthermore, the partnership was made through ABS’CBN’s subsidiary, ABS-CBN Convergence Inc.

ABS-CBN Mobile Service Unstable

After a thorough evaluation, ABS-CBN Convergence has decided that its mobile services is not financial stable. This led to a mutual decision not to renew the partnership.

Existing SkyMobi, ABS-CBN mobile prepaid and postpaid subscribers will continue to enjoy text, call, and data services until the end of November 2018. SkyMobi and ABS-CBN mobile offers will cease starting October 25, 2018.

The company (ABS) wishes to express its gratitude to its loyal subscribers and will continue to provide them with updates on their plans and subscriptions.

The company, however, will continue partnering with Globe on other services such as the bundling of ABS-CBN TV Plus with Globe at Home Prepaid Services. This also includes making ABS-CBN TV Plus’ KBO and Iwant TV as an over-the-top service for all Globe subscribers.

Financial Records

For the first six months of the year, ABS recorded revenues of PHP 18.90 billion. This is a 2.1 percent year on year decline versus the recorded PHP 19.34 billion in 2017.

Revenues from advertisements declined by 3.1 percent or PHP 302 million in the first half of the year.

Consumer sales were also lower by PHP 106 million which was due to lower theatrical receipts from Global and ABS-CBN Films as well as lower sales from Sky Cable.

Revenue mix remains the same for the year 2017 and 2018.

Net income of the company totaled PHP 741 million, a huge decline of 41 percent from the recorded PHP 1.26 billion a year ago. This was mainly due to lower revenues but higher expenses for the first six months of the year.

Technical Analysis

ABS has been making new 52-week lows. Lower highs and lower lows are in place. The moving averages are bearishly aligned.

It appears, however, that the price has breached the 15 EMA and 20 SMA resistance. This is still too early to tell if indeed the trend has reversed.

Higher highs and higher lows should still be recorded. Volume profile still supports a bearish outlook.

MACD is already showing a bullish divergence. RSI is confirming the same divergence. Support is estimated at 20.00 while resistance is expected at 23.32.


As of October 16, 2018, at 03:30 PM, the volume of ABS is 287.69% of the previous trading day. This stock’s latest volume is still below its 30-day volume average.

Remember the correlation between price and volume.

bullish price + volume above the 30-day volume average = bullish
bullish price + volume below the 30-day volume average = neutral
bearish price + volume above the 30-day volume average = bearish
bearish price + volume below the 30-day volume average = bearish

Risk Level

ABS has a LOW-RISK level due to its risk percentage of 27.56%.

Top 10 Players’ Sentiment

Trading participants of ABS with a 100% Buying and Selling Activity as of Oct-16-2018 at 03:30 PM:

4 out of 11 participants or 36.36% of all participants registered a 100% BUYING activity
3 out of 11 participants or 27.27% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 21.0493
Top 10 Players’ Selling Average: 21.1270

The psychological average price of the top 10 players as of Oct-16-2018 at 03:30 PM is from 21.0493 to 21.1270.

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