Wednesday, October 13, 2010

SPH - UOBKH cuts SPH to Hold; Earnings outlook flat

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD
Research House: UOB KayHian


UOB KayHian downgrades Singapore Press Holdings (T39.SG) to Hold from Buy; says final dividend priced in as share price has rallied about 4% since early September in anticipation, says Dow Jones. 



Notes, FY10’s “sterling performance” due to strong rebound in ad revenue, Sky@eleven’s contribution, low newsprint cost. Expects ad revenue growth to taper off to 7% in FY11, 5% thereafter. 


Says against single-digit top-line growth (+6.1% on year), earnings outlook flat, while costs will be a concern; forecasts SPH's average newsprint charge-out at US$700/ton by FY12 vs average US$535/ton ($698/ton) in FY10. 

House trims fair price by 3% to $4.35 from $4.50; “While the price upside to our revised fair price is a mere 3%, SPH still offers an attractive dividend yield of above 5%.” 

Shares +0.9% at $4.26.

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