SPH

SPH: 3QFYAug12 results, revenue broadly inline, net profit slight miss. Net profit contracted 13% yoy to $100m (72% of Deutsche’s FY12 est) as a combination of anemic revenue growth, weaker margins and lower invmt income impacted. In particular, investment income plunged 60% on FX losses and lower dividend income. 3Q12 revenues grew just 1% YoY to $332m, representing the slowest rate of revenue expansion since 2009. Specifically, advertising revenues at $202m flatlined YoY. FMCG and info-tech / office equipment were the weakest advertising sectors while property and fashion continued to do well. Circulation revenues continued to fall and other revenues contracted for the first time in several years on slowdown in the exhibitions business. The bright spark was a 13% increase in rental income on full Clementi Mall contributions and Paragon rental reversions. Overall, 9M12 revenues were in line at 74% of DB12e. 3Q12 opex increase was fairly contained at 4% YoY, driven largely by increased headcount and higher costs associated with SPH’s mall operations. Materials & other costs fell 6% YoY on lower print volume, further supported by the relatively modest 2% increase in newsprint charge-out price. The co expects 4Q12 newsprint charge-out price to hold steady QoQ. Deutsche notes while SPH's tight trading range ($3.60-$4) in recent years suggests this could be interesting to investors looking for defensiveness (particularly in view of the FY12e 5.4% dividend yield), SPH's near-term operational performance will likely remain subdued and valuations are not particularly attractive. Keeps at Hold with TP $4.12. OSK maintains Neutral, lowers TP to $3.85 from $3.91. UOBK keeps at Buy but lowers TP to $4.50 from $4.60. CIMB maintains Outperform, raises TP to $4.40 from $4.19