Company Name: SINGAPORE PRESS HLDGS LTD
| Research House: Citigroup | Price Call: SELL | Target Price: 3.80 |
Citigroup downgraded print and property company Singapore Press Holdings to ‘sell’ from ‘buy’ and cut its target price to $3.80 from $4.15 on weaker-than-expected quarterly earnings and slower growth prospects for the next year.
Shares of SPH were down 0.5% at $4.09, but have risen 10.8% since the start of the year, compared to the Straits Times Index's 15.4% gain.
SPH posted net profit of $365.5 million for its financial year ended August, down 5.9% from a year earlier.
Citi said SPH's fourth-quarter net profit of $84 million was weaker than expectations, due to poor print ad sales, falling circulation demand and rising cost pressures.
Citi cut its 2013-2014 earnings estimates for SPH by 8-11%, reflecting the company's challenges to grow its core media business in Singapore as classified and circulation segments continue to decline.
“We think demand for print ads is unlikely to pick up strongly amid moderate growth expectations in 2013 and a lackluster structural outlook for circulation,” said Citi in a report.
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