SPH

SPH: Announced 1Q12 results which was in-line with expectations. Net profit of of $97.5m (+1.5% QoQ, -4.7% YoY) was in line with street expectations and formed 25% of consensus full-year estimates.

Print ads revenue ($204mn) was marginally lower YoY (-1.2%) but was higher on a sequential basis (+7% QoQ), largely due to contributions from Magazines ($23.4m, +43.1% QoQ) and Displays (+7.6% QoQ).

On the ppty front, both Clementi Mall and Paragon are fully leased and 1Q12 rental turnover of $47m (+27% YoY) helped offset the decline in Print ads sales. Moving forward, the ppty segment is expected to provide the group with a steady stream of recurrent income.

Operating cost ($188mn) rose 6% YoY in the Nov qtr on back of expenses incurred from the commencement of Clementi Mall operations, newspaper subscription drives and step-up in overheads, while newsprint cost rose 5% YoY to $26m, mgt expects this to moderate moving
forward on the back of general market uncertainties.

Overall, street is fairly positive on grp and believe the defensive nature of its core media business and recurrent property rental would continue to contribute to the group’s strong cashflow and sustain div yields.

Citi maintains Buy with $4.15 TP
Kim Eng maintains Buy with $4.17 TP
CIMB Maintains Neutral with $3.90 TP
UOB Kay Hian Maintains Neutral with $3.90 TP
RBS Reiterate Hold with $3.88 TP.