BUY: Citigroup Research - Sep 16, 2006 (BT)

BackSep 16, 2006

Brokers' Take

BUY: Citigroup Research

Singapore Press Holdings, Sept 15 close: $4.04

Sep 16, 2006
The Business Times



ONLINE JVs: In a move to increase its capabilities in the online Internet space, SPH has entered into two joint ventures with Norwegian media company Schibsted. Schibsted is a leading media group in Scandinavia with a wide presence in Europe.

Initial investment of over $2 million: The first is a regional JV, 701Search. The company will identify potential investment in online classifieds, search and directories across South-east Asia and Greater China. SPH and Schibsted will own 50 per cent each in the company. The second is a Singapore JV, SPH Search, which will focus on online search and directories in Singapore. SPH will own 75 per cent of this company and Schibsted 25 per cent. They will initially invest over $2 million each to set up the two JVs.

Synergising capabilities: The JVs bring together Schibsted's technologies and capabilities in the online business, SPH's expertise as a leading content provider and its understanding of and network in the Asian markets.

No material impact: SPH has been exploring avenues to venture into the region while recognising the impact of the Internet on traditional media players. These ventures, we believe, are SPH's responses to competitive challenges ahead for the group. Online penetration in SPH's business is still low. The ventures are not expected to have any material impact on the group.

Defensive stock with attractive yields: We see SPH as a defensive stock with a strong balance sheet, cash flow and sustainable dividends. Maintain 'buy'.