Thursday, October 13, 2011

SPH

SPH: Announced 4Q11 results which was in-line. A final div of 17 c/share was declared, bringing full yr div to 24c/share (6.5% yield).

In the absence of property development rev, total rev dipped 9.4% yoy to $1,251.0m due to strong growth in its rental and exhibition businesses, while Net profit fell 22% to $388.6m. Newspaper and magazine pre-tax profit was flat at $365.6m, while rental profit was up 32% yoy and investment income +39.6% yoy, driven by earlier gains in equities investments.

Overall, operating margin was sustained at a healthy 30% and circulation levels were maintained at an average of 1m copies daily for FY Aug11 and with SPH’s penetration into the digital space since Aug11 via iPad and iPhone applications, the Group’s advertising market
share should remain well protected.

Mgt remains confident on outlook, and has yet to see a notable slowdown in advertising demand in view of the weak economic outlook. Ratings are as per follow

Kim Eng maintains Buy with $4.17 TP.

DMG maintain N, TP $3.91 from 4.12, lower TP due to a decline in valuations for its peers. Higher than expected advertising revenue remain as positive catalysts.

DB Hold, TP $3.80, continue to expect anemic NPAT growth at 2% FY11a-14e CAGR and anticipate the stock will trade sideways in a slow growth environment.

CS Neutral, TP$4.45 from $4.41, 4Q/FY11 in line, no catalysts in sight.

JPM reiterate O/w, TP $3.80, Core publishing business to remain challenging, rental income to cushion recurring profit decline, Share price performance likely to remain defensive.

Nomura Neutral, $TP 4.09, currently trades at a FY12 PE of 16.1x (historical PE band of 9x-21x) with an attractive FY12F dividend yield of 6.4%.

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