SPH

SPH: OCBC sees SPH’s REIT spin-off as a positive move and believe management’s decision to hold a 70% majority stake makes significant sense. However, the latest 3QFY13 figures presented a picture of contined headwinds for the group’s core print business given the cumulative impact from cooling measures on property and automobile ads. 3QFY13 ad revenues fell 4.5% YoY in 3QFY13 and circulation revenues also dipped 3.2% YoY. With current headwinds for the print business and limited visibility in terms of catalysts ahead, believe the risk-reward proposition for the counter has turned fairly neutral. Overall, house downgrade to HOLD with a lowered fair value estimate of $4.14, versus $4.94 (before the REIT spin-off) previously. House barometer for an upturn in outlook ahead consists of two key groups of operating metrics: for its print businesses - ad and circulation revenue growth; and for its retail property segment – expedient and accretive capital deployment.