BIZ BUZZ: ‘Undervalued’ TEL

Undervalued” is how business tycoon Manuel V. Pangilinan, a.k.a. MVP, describes the market capitalization of telecom giant PLDT, which decades ago had been the most valuable company in the country.

PLDT is currently valued by the market at around P353 billion, lagging behind Globe Telecom’s P421 billion but ahead of newly listed Converge ICT’s P237 billion.

Globe’s buoyant market cap has been attributed to the “halo” effect of the GCash platform, especially during the recent funding round that valued its operator Mynt (which has a 48 million user base) at $2 billion, achieving a “double” unicorn status.

Pangilinan told a media briefing yesterday that the group’s PayMaya/Voyager business, although subject to market testing in the next funding round, may have also achieved “unicorn” status.

Given the growth achieved by this digital business, MVP said it could now be valued at $1 billion, higher than the $747 million valuation in the last funding round.

With the rollout of Maya Bank in 2022, valuation is also expected to get a boost.

“I don’t think the market yet appreciates the impact of the increasing value of PayMaya,” MVP said.

Meanwhile, he said the price differential with Converge (P110 billion to P120 billion) was probably how the market was pricing PLDT’s enterprise and wireless business together (which account for 60 percent of PLDT’s business) with a bit of the international business.

This meant the market was pricing the enterprise and wireless businesses of PLDT at only P120 billion, MVP said, noting this was on the “very low end of the scale.”

“In fact, [it] underprices the value of our home business, whose revenues are almost twice that of Converge and whose [subscriber] base is ahead of Converge,” he said.

He is confident this subscriber base gap would widen in the coming months or years.

Meanwhile, MVP said another factor why PayMaya was lagging in terms of perceived valuation was because his group could not be articulating the growth story too well.

“Clearly, PayMaya has made much progress this year and the idea is to catch up in value with how Globe has done,” he said.

At the same time, he said PLDT should do a better narrative on growth areas, particularly in the fixed-line segment, where it is way ahead of competition, alongside the data centers and other areas.

“We have to tell our growth story and we think that that will come,” he said.

—Doris Dumlao-Abadilla

New Max’s prexy

The “house that fried chicken built,” Max’s Group Inc. (MGI), has appointed consumer brand veteran Ariel Fermin as its new president effective Nov. 2, taking over the position from Robert Trota, who retains long-term strategic oversight as chief executive officer. Fermin, 53, who moved up the corporate ladder from his old post as chief operating officer, is responsible for the overall commercial and operational performance of MGI and its roster of brands such as Max’s Restaurant, Pancake House, Yellow Cab Pizza Co., Krispy Kreme, Jamba Juice, Dencio’s, Teriyaki Boy and Sizzlin’ Steak. He is also expected to identify both external and internal opportunities for expansion, customers, markets, new industry developments and standards, as well as execute initiatives in line with the group’s vision.

Fermin has had over three decades of leading consumer brands across a diverse range of industries. He had headed the consumer business of PLDT and was a president of Greenwich and Chowking. He had also been the country chief for Nike and South East Asia head for basketball at Nike. He had also held various marketing and sales positions at Coca-Cola, Unilever and Procter & Gamble. He obtained his degree in Chemical Engineering from University of the Philippines Diliman.

“I firmly believe that our local brands and industries have what it takes to shine on the global stage. I am excited by the opportunity to assume greater stewardship of MGI through its newest chapter using my experience and perspective to help the group navigate its most dramatic evolution yet, all the while continuing to work closely under the guidance, culture and values of our founding families,” said Fermin.

“MGI has demonstrated an unmatched resiliency and flexibility even as the COVID-19 crisis continues to alter the global food industry. Through it all, none of this would have been possible without the leadership of Ariel Fermin, who has helped us accelerate three years of strategy into three quarters of execution throughout the pandemic, helping us define new sources of wealth, streamline our operations and build newfound agility into our organization. We look forward to having him on board as our new president to continue supporting our efforts to future-proof the business,” said Trota.

—Doris Dumlao-Abadilla