Company Name: SINGAPORE PRESS HLDGS LTD
| Research House: UOB KayHian | Price Call: BUY | Target Price: 4.60 |
UOB Kay Hian said it expects Singapore Press Holdings to report a net profit of about $105 million for its third quarter, down 9% from a year earlier, mainly due to lower net investment income.
SPH is expected to report its results for the three months ended May on July 13.
SPH shares were up 0.3% at $3.79 on Tuesday and have risen nearly 3% so far this year versus the 6% gain in the broader Straits Times Index.
For the third quarter of its 2011 fiscal year, SPH reported a relatively high net investment income of $23.7 million, boosted by fair value gains, UOB said. It noted that SPH's net investment income is usually around $5-10 million a quarter.
UOB said it forecast advertising revenue to fall 1-3% from a year earlier, while SPH’s newsprint prices have peaked and are expected to be flat going forward.
But the broker said SPH offers relatively resilient earnings and an attractive annual dividend yield of 5.8%.
“Defensive stocks are back in vogue amid stock-market volatility,” UOB said, maintaining its 'buy' rating and target price of $4.60 on SPH stock.
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