SPH

SPH: Announced 2Q11 results, which were in-line, albeit at the lower end of estimates. Rev at $287.8m, -9.7% YoY and -10% QoQ, while Net Profit at $75.4m, -33.5% YoY and -35.6% QoQ, due largely to the sale of Sky@eleven at 2Q10. Excluding One-Off Sale, Group operating rev rose by $20.5m, +7.7% with increases across all business segments....

Operating rev for Newspaper and Magazine segment remained healthy at $234.3m, +5.2% YoY and Print ad rev at $176.3m, +6.6% YoY, driven by strong showing in Display and Recruitment ads, while rental income from Paragon increased 12.9% as a result of higher incremental rental from façade enhancement, while Clementi Mall registered its maiden income in Jan11....

Operating rev for Newspaper and Magazine segment remained healthy at $234.3m, +5.2% YoY and Print ad rev at $176.3m, +6.6% YoY, driven by strong showing in Display and Recruitment ads, while rental income from Paragon increased 12.9% as a result of higher incremental rental from façade enhancement, while Clementi Mall registered its maiden income in Jan11....

Result brings 1H11 rev to $606.5m, -9.8% YoY and Net Profit at $177.7m, -31.1% YoY, on track to meet FY11 rev estimates of $1.23b and net profit consensus estimates of $400.5m. Going forward, grp remains positive on prospects and tip print ad rev to move in tandem with the performance of the SG domestic economy, and expect its 2 property assets to contribute a steady stream of rental income to Grp....

At current price, grp appears fairly priced, trading at an annualized 18.1x FY11E P/E vs historical average of 15x. Co has declared an interim div of 7c/share (1.8%) which will be paid on May 24, 2011. Deutsche and Kim Eng maintains Buy with $4.33 and $4.68 TP, while CIMB remains neutral on grp with $3.98 TP.