Company Name: SINGAPORE PRESS HLDGS LTD
| Research House: Maybank Kim Eng | Price Call: BUY | Target Price: 4.50 |
Singapore Press Holdings still offers an attractive yield even after the media and property firm reported
a 5.9% fall in 2012 net profit mainly due to lower investment income, brokers said.
SPH shares were up 0.5% at S$4.09 on Monday. The stock has risen nearly 11% so far this year versus the 15% gain in the broader Straits Times Index.
SPH posted net profit of S$365.5 million ($299.3 million) for its financial year ended August, down 5.9% from a year earlier. The company announced full-year dividend of 24 Singapore cents, representing a yield of nearly 6%.
Maybank Kim Eng said the yield spread between SPH and 10-year government bond is now 443 basis points (bps), above the historical average of 350 bps.
The broker expects SPH to declare a dividend of 25 cents for 2013 fiscal year, implying yield of 6.2% which it said is still very attractive. Maybank raised its target price to $4.50 from $4.43 and kept its ‘buy’ rating.
CIMB Research, which has an ‘outperform’ rating and $4.39 target price, said SPH’s property business remains the star performer and could help drive dividend payout in 2013. Both Paragon and Clementi malls had rental increases this year, CIMB noted.
OCBC Investment Research said falling margins highlighted the increasing uncertainties for SPH’s core print business, but SPH’s dividend yield is likely to limit the share price downside. OCBC has a ‘hold’ call and $4.05 target price.
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