Company Name: SINGAPORE PRESS HLDGS LTD
| Research House: CIMB | Price Call: BUY | Target Price: 4.19 |
Singapore Press Holdings is becoming increasingly like a retail real estate investment trust (REIT), CIMB Research said, noting its growing retail property arm and stable media business, as well as typical payouts of more than 90%.
While SPH’s newspaper and magazine segment is expected to remain dominant and underpin cash flows, CIMB said growth is likely to come increasingly from the firm’s retail malls.
“With a growing property arm, we do not dismiss the possibility of a spin-off or sale of assets to a REIT over the longer term,” CIMB said, adding that SPH has a strong balance sheet and limited cash-call risks.
The broker also said SPH is a cheaper alternative for investors seeking exposure to retail Singapore REITS after the stock’s underperformance, offering yields of 6.4% versus an average of 6.1% for retail Singapore REITs.
SPH shares were up 0.3% at $3.79 on Tuesday, while the Straits Times Index was 0.7% higher. So far this year, SPH has risen nearly 3 %, underperforming the 7.5% gain in the index.
CIMB said revenue compound annual growth rate for SPH’s “gem asset”, Paragon shopping mall in Singapore, stood at 8.3% over 2006-2011, outstripping growth for comparable assets under retail Singapore REITs.
It expected similar success for SPH’s Clementi Mall during its first renewal cycle and for Sengkang Mall on completion. It upgraded its rating on SPH to outperform from neutral and raised its price target to $4.19 from $4.13.
No comments:
Post a Comment