Singapore Press Holdings Ltd (SPH SP) – Recovery in continuing operations (8 October 2021)

Equity Research Singapore Press Holdings Ltd (SPH SP) - Recovery in continuing operations (8 October 2021)


 

 

 
 

Equity Research
8 October 2021

 

This document is prepared for the non-institutional, high net worth individual clients of Bank of Singapore Limited and their family offices, private investment companies, trusts, asset managers and financial advisors. 

Equity Research
Singapore Press Holdings Ltd (SPH SP)

Risk rating: 4
Recommendation: HOLD
Fair Value: SGD 1.92
ESG Rating (MSCI): A

Recovery in continuing operations

  • Shareholders have given approval to transfer the media business to a not-for-profit company limited by guarantee at the recent EGM on 10th September. 
  • FY2021 PBT of continuing operations excluding fair value changes rose 62.8% to SGD258.4mn. Media business (discontinued operations) continued to see losses of SGD38.7mn in FY2021.
  • Final dividend of 3 cents/share was declared, bringing total dividend for FY21 to 6 cents/share.
  • Next steps include an EGM to be scheduled to seek approval for the privatization offer by Keppel Corp (expected around middle November), SPH will eventually delist and privatise under this plan.
 

Investment Thesis (SPH SP)

SPH is a leading media organization in Asia, which is in the process of innovating digitally to transform its media business to meet changing readership and advertisers’ needs. To diversify its income stream beyond media which is seeing structural headwinds, the group had made moves beyond its core business over the years to diversify its portfolio, including its acquisition of student accommodation assets overseas, positioning in the aged care market in Singapore (Orange Valley Nursing Homes) with plans for expansion in Japan with Bridge C Capital and acquisition of M1 limited (with Keppel Corp) in April 2019 to leverage on synergies and explore new areas of growth, and conducted a strategic review this year which resulted in the transfer of the media business to a not for profit company limited by guarantee. While a modest recovery path for the company’s key businesses (non-media: continuing operations) is the base case ahead, supported by vaccine rollouts progress and global economic recovery, near term share price performance is expected to be rangebound ahead of the EGM expected in November on Keppel Corp’s recent privatization offer, where SPH is expected to be eventually delisted under this plan.   

For the full report Click Here 

Camilia Goh, CFA, CAIA 
Executive Director, Equity Research

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