SPH

SPH: SCB recommends accumulate on weakness with an OutPerform Target and $4.36 TP. House note that Conviction of SPH employee for corruption is an isolated incident. Recall, former SPH senior executive, Peter Khoo, was fined $100,000 for corruption and criminal breach of trust. In the wake of this news and after counter went XD, SPHs stock dropped 4% from its 6 Dec12 close. SCB add that fundamentals are unaffected and the incident has not detracted from the stocks basic value proposition. SPH FY13 div yield, at 6.8%, is 40% higher than the peer group average and has outperformed the FSSTI by 8% since Oct07. Accounting for both div and capital gains, it has produced total shareholder return of 25% p.a. in the past five yrs. Overall, tip strong barriers to entry protect SPH; hence, view the current sell-off as an opportunity to accumulate. At 6.8% FY13 div yield, it is the foremost among classic SG yield plays.