UOBKayhian on 13 Feb 2014
FY14F PE (x): 21.7
FY15F PE (x): 21.7
Weaker adspend in Dec 13 and Jan 14 than in 1QFY14. Our monthly page monitor of The Straits Times suggests advertising spending (adspend) remains weak with a yoy contraction of 13% and 11% in Dec 13 and Jan 14 respectively. Recruitment ad volume contracted by 21-23% yoy, while classified and display ad volumes shrunk by 16-21% and 7-12% yoy respectively. To a certain extent, January’s adspend was affected by an early CNY on 31 January compared with last year’s later CNY which fell on 10 February.
Adspend tapered off in the last week of Jan 14. SPH had earlier reported an actual advertising revenue contraction of 2.9% in 1QFY14 (Sep-Nov 13), better than the 5% contraction implied by our page monitor. Maintain HOLD. We maintain our target price of S$4.00 which is based on sum-of-the parts (SOTP) valuation. Our recommended entry price is at S$3.80 and below.
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