Monday, July 18, 2016


SPH (S$4.07): 3QFY16 results disappoint in struggle to cope with the digital age
- 3QFY16 results missed street expectations as net profit slumped 46.4% to $52.7m, hurt by impairment charges
- Revenue fell 5.7% to $296.7m, dragged by a 7.1% drop in its core media business to $216.6m on weaker advertising sales
- Impairments were made to its magazine business whose performance was affected by the ongoing shift in consumer behaviour.
- Challenging operating environment to persist in view of the uncertain economic outlook and the continued evolution of consumer behaviour and media landscape
- Valuations for the media group appear relatively demanding
- Street is bearish on the counter with 6 Hold, 5 Sell ratings and consensus TP of $3.52, implying downside of 13.5% from last close.

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