SPH

SPH: SPH’s advertising revenue contracting appears to be tapering off as their advertising spending contracted 2% yoy in 3QFY15 vs a reported advertising revenue contraction 9% yoy in 2QFY15.SPH attributed 2QFY15’s weak advertising revenue to advertisers’ reluctance to step up spending in view of: a) weak domestic spending given the locals’high propensity to travel and spend overseas and e-commerce, b) lower PRC arrivals and thus consumer spending on luxury goods, and c) lower Indonesian and Malaysian arrivals.

While there isn’t any near-term share price catalysts, the annual dividend yield of 4.4% remains decent for FY15-17 amid a low interest-rate environment.

UOB Kay Hian maintains its HOLD rating with TP: $4.20 based on SOTP valuation. The house’s recommended entry price is $4.00 and below.