SPH shares rise on third-quarter gains - Jul 13, 2007 (ST)

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The Straits Times / The Business Times News On SPH

SPH shares rise on third-quarter gains

The stock closed at $4.56, up six cents, on a volume of more than 10 million shares.

By Chua Hian Hou
Jul 13, 2007
The Straits Times

SHARES of media group Singapore Press Holdings (SPH) rose 1.3 per cent yesterday, after its impressive third-quarter results sparked a series of positive analyst reports.

The stock closed at $4.56, up six cents, on a volume of more than 10 million shares - well up on its usual daily average of six million. It had hit $4.62 in intra-day trading.

The buying flurry followed SPH's third-quarter results on Wednesday, which reported that the media group had a 48.3 per cent jump in profit before exceptional items to $186.1 million, while operating profit rose 15.2 per cent to $108.8 million.

Net profit fell 8.5 per cent from the same period last year but 2006's result had been inflated by a $69.1 million one-time gain.

The figures, particularly the robust operating profit and revenue - up 8.4 per cent to $288.1 million - prompted strong endorsements from analysts.

Of the six research firms covering SPH, four - Credit Suisse, Citigroup Investment Research, DBS Vickers and JPMorgan - gave 'buy', 'overweight' or 'outperform' recommendations and set price targets of between $5.15 and $5.50.

Credit Suisse research analyst Sean Quek, who upgraded his previous 'neutral' rating to 'outperform', liked the better-than-expected newspaper advertising revenue, which he hoped could continue to improve.

Mr Paul Yong of DBS maintained his 'buy' rating, saying that SPH offered an opportunity for 20 per cent or more in investment returns if its shares hit the $5.45 target he set.

If not, he wrote in his report, there is always the 'attractive prospective 5.8 per cent dividend yield'.

OCBC Investment Research's Mr Kelly Chia gave the stock a 'hold' rating.

But he noted that the two consecutive quarters of positive earnings from SPH's associated companies and joint ventures signalled that these investments were likely to have 'turned the corner'. He did not elaborate.

Goldman Sachs had a 'sell/neutral' rating.