BUY: Citigroup Research - Nov 24, 2006 (BT)

BackNov 24, 2006

Brokers' Take

BUY: Citigroup Research

Singapore Press Holdings Nov 23 close: S$4.30

By Compiled by Matthew Phan
Nov 24, 2006
The Business Times


Chairman outlines plans to grow beyond Singapore: In SPH's latest annual report, chairman Tony Tan outlined that SPH's vision is to become an international multi-media group covering South-east and East Asia.

Going beyond print: SPH is looking to expand its magazines, outdoor media and on-line classified businesses, and is on the lookout for acquisition opportunities.

Display revenues up in September, but not a trend yet: While the group is hopeful that the economic recovery will broaden to domestic sectors, it is early days to conclude that a recovery in display revenues is underway.

Costs are well managed: Staff costs are likely to rise in line with the national average while additional headcount is planned for new business initiatives. Newsprint costs have been hedged to June 2007.

Yields at Paragon should improve: Paragon continues to benefit from higher rental reversions and will see a net addition of some 15,000 sf. There are no plans to divest this property, which is well positioned to ride the retail property uptrend.

Times Industrial Building (TIB) redevelopment: We raise our profit estimate for this property based on a higher average selling price of S$900 psf (versus S$780 psf previously).

Forecasts and target price raised: On higher expected profits from TIB, we are raising our profit estimates by 3-4 per cent for FY08 and FY09. We also raise our price target slightly to S$5.15. Reiterate 'buy/low risk (1L)' rating.