BUY: Nomura Asia Equity Research - May 21, 2005 (BT)

BackMay 21, 2005

Brokers' Take

BUY: Nomura Asia Equity Research

Singapore Press Holdings May 20 close: $4.32

May 21, 2005
The Business Times



THE early indicators for Singapore Press Holdings' (SPH) ad-spend are starting to look more positive. Our page-count analysis saw Saturday pages up by 15 per cent on average in April, and by 10 per cent in May. This compares with a 5 per cent average rise in April according to AC Nielsen, though this would not capture classified gains.

Compared with current page-count levels - about 220 pages every Saturday for the past three months - 4Q FY04 was relatively weak averaging just 200 pages. If this hit-rate continues, we can expect both 3Q FY05 and 4Q FY05 to be well ahead of last year, and support our forecasts for 6.7 per cent ad-spend growth and 17.6 per cent Ebit growth.

While SPH offers one of the lowest top-line growth outlooks in the Asian media sector, we believe both the growth and the valuation (supported by dividend payments and property assets) are at less risk than many other media stocks. This risk-return outlook and our fair value estimate of $5.22 ($4.22 DCF of core, $1 of non-core) underpin our 'buy' call.


Compiled by R SIVANITHY