UOBKayhian on 23 June 2015
FY15F PE (x): 23.4
FY16F PE (x): 23.4
SPH’s advertising revenue contraction appears to be tapering off. Our page monitor of
The Straits Times points to an adspend contraction of 2% yoy in 3QFY15 (2QFY15:
Reported -9% yoy). While we do not see any near-term share price catalysts, the annual
dividend yield of 4.4% remains decent. Maintain HOLD. Target price: S$4.20. Entry
price: S$4.00 and below.
Focus is on property initiatives. As the media business remains a mature business, we
expect SPH to rein in costs and intensify its search for new business initiatives. Seletar
Mall – a 70:30 JV between SPH and United Engineers – obtained Temporary
Occupation Permit (TOP) on 28 Oct 14 and opened its doors to shoppers on 28 Nov 14.
The four storey family-oriented mall houses more than 130 brands and has a diverse
mix of anchor tenants including premium supermarket FairPrice Finest, cineplex Shaw
Theatres, food court Foodfare, Japanese casual clothing company UNIQLO, ladies-only
fitness centre Amore Fitness & Boutique Spa and department store BHG. Given that the
media business remains as a mature business, we expect SPH to rein in costs and
intensify its search for new business initiatives. Maintain HOLD. Our target price of
S$4.20 is based on a SOTP valuation. Our recommended entry price is S$4.00 and
below.
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