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Post Info TOPIC: SPH
tfwee


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RE: SPH
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SPH reports Full Year Net Profit of $506 million SINGAPORE, 12 October 2007

Singapore Press Holdings Limited (SPH) today reported its full year results for year ended 31 August 2007. Net profit was up 18.1% to $506.2 million compared to previous years $428.5 million which included an exceptional gain of $66.8 million. Operating profit* rose by 20.2% to $434.2 million. This included the maiden profit of $47.8 million from sale of the Sky@eleven condominium recognised on a percentage-of-completion basis.

The Groups operating revenue climbed 13.6% to $1.16 billion. Newspaper and Magazine operations increased 5.8% to $959.4 million on the back of a strong 7.2% growth in print advertisement revenue to $725.1 million. Revenue from Property operations surged 80.2% to $177.8 million with the inclusion of $71.3 million from Sky@eleven and an increase of $7.8 million from Paragons rental income growth.

Total operating expenses increased by 10.1% to $738.3 million. Property development costs of Sky@eleven accounted for $23.5 million while staff costs were higher by 12.5% or $33.6 million as a result of variable bonus provision, increased headcount and annual salary increment. Variable bonus provision was in line with the Groups higher operating profits and the Groups new performance-based incentive scheme. Total headcount in August 2007 was 3,735 compared to 3,585 a year ago because of the acquisition of new subsidiaries and staffing for new media businesses.

Group investment income was up 79.0% to $146.2 million. This comprised mainly net profit on sale of investments and profits from capital reduction exercises by Starhub Limited and MobileOne Limited.

Commenting on the outlook for FY 2008, Mr Alan Chan, Chief Executive Officer of SPH said: Outlook for the Groups print advertisement revenue is positive given the generally healthy economic environment. Property segment will be boosted by profits recognised for Sky@eleven over the life of the project. The Group remains committed to sustaining the core newspaper business margin and will continue to invest in new media platforms as part of its growth strategy. Barring unforeseen circumstances, the Directors expect the recurring earnings for the current financial year to be satisfactory.

The Directors of SPH have proposed a Final Dividend of 19 cents per share, comprising a Normal Dividend of 9 cents per share and a Special Dividend of 10 cents per share in respect of the financial year ended 31 August 2007. These dividends are on tax-exempt (one-tier) basis and will be paid on 27 December 2007. Together with the Interim Dividend paid during the year, total Dividend payout for FY 2007 will be 26 cents.


-- Edited by tfwee at 20:46, 2007-10-12

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tfwee


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SPH, macq upgraded to OUTPERFORM from Neutral with target price $5.05 (from $4.20)

We upgrade SPH to Outperform from Neutral with a revised target price of S$5.05 from S$4.20. The expected total return is 23%. SPH has been a significant underperformer relative to the STI, rising only 1% vs the STI's 26% year-to-date gain. Our new forecast takes into account continued print ad growth, the initial contribution from the Sky residential project, and macro factors that can benefit SPH. We transfer coverage to Valerie Law.

Strong core business. Revenue in 3Q07 has been the highest in the past 19 quarters, while operating costs have been well managed. Non-traditional growth will come from acquiring related companies, and partnerships, as SPH seeks to monetise its existing database and capabilities. The pooling of resources with joint venture partners will help shorten its learning curve.

Population boost. The group's traditional and new media will benefit from continued population growth in Singapore, indicating rising readership. Macro factors like exposure to high-profile global financial gatherings and F1 racing events supports the double-digit growth outlook for outdoor media. - Paragon sale? In the scenario that Paragon is sold in FY08, SPH will record an extraordinary gain of more than S$820m for FY08. Thereafter, SPH will rely on revenue from its media business, which will generate revenue in excess of S$1b pa with 3-4% growth in the next few years. One risk is a potential US economic slowdown affecting consumer sentiment and corporate ad spending.

Earnings revision . Our FY07 earnings forecast has been raised 22% to S$495m, while that for FY08 rises by 44% to S$578m.


-- Edited by tfwee at 22:54, 2007-10-08

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KK


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12 Jul 07

Benefits from strong economy

Core operations benefit from Singapore economy. SPH reported its 3Q07 results yesterday with operating income growing 8.6% YoY to S$291m. Core operating profits before investment income and exceptionals rose an encouraging 15.2% YoY to S$108.8m. SPH reaped a one-time gain from MobileOne's capital reduction exercise, resulting in a 139% YoY jump in investment income to S$75.3m. Despite the better performance in core operations and jump in investment income, net profit declined 8.7% YoY to S$159.8m for the quarter. This was due to 3Q06's one time gain of S$69.1m from the upward revaluation of Paragon.

Print ads boost core printing business. Revenue for SPH's main printing business rose 7.8% YoY to S$255.7m, primarily aided by its print ads which grew strongly by 10.4% YoY to S$195.6m. This was roughly in line with AC Nielsen's latest Adex figures which indicated a 14% YoY rise in SPH's Feb-May display ad volumes.

Double edged sword in bullish economy. SPH's diadem, Paragon, was not left out in the cold as a spectator in the hot property market. Knight Frank recently revalued Paragon from S$1.52b to S$1.82b, thereby adding S$0.19 to our valuation. However, the booming economy is also a double-edged sword. The bid to stay competitive with bonus provisions and increments in salary was evident in its staff costs climbing 12% YoY to S$76.7m. We expect staff cost to continue to rise moderately as SPH expands organically with new media businesses and to retain staff.

Starting to keep stride. SPH has finally started to match the Singapore economy's growth pace. Along with better-than-expected investment gains and growth in print ads, we also see that SPH's associated companies and JVs have likely turned the corner as they are contributing positively for the second consecutive quarter. As such, we revise our net profit for FY07 to S$521m (previously S$461m). We remain conservative on the outlook in FY08 and revise our net profit less aggressively to S$536m (vs. S$524m). We up our fair value from S$4.60 to S$4.87, but maintain our HOLD rating due to its limited upside.

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12 Jul 07

Impressive ad revenue growth in 3Q07

Strong display and classifieds revenue in 3Q07. Display revenue grew by 12% y-o-y to S$106m and classifieds revenue grew by 7% y-o-y to S$76m to lead the core publishing business to its strongest revenue growth in 10 quarters by 8% y-o-y to S$256m. This led to a 15% y-o-y growth in PBT to S$100m. Property revenue also grew by 7% y-o-y to S$26m, led by higher rentals at Paragon.

Firm investment gains. Net income for the quarter rose by 140% y-o-y to S$75m, due mainly to gains on sale of investments, as well as a capital reduction exercise by M1. Excluding a gain on write-back of impairment charges relating to Paragon of S$69.1m in 3Q06, net earnings for the quarter rose by 51% y-o-y to S$160m.

Strong results underscore robust outlook for SPH. We believe that this set of good results is an indication of better things to come for the Group. We continue to like SPH as a proxy for the Singapore economy, given its dominant position in print advertising, as well as its exposure to the firm domestic property and equities markets.

SPH offers attractive valuations. Stripping out the Groups net cash and investments as well as properties, SPHs core publishing business is trading at an undemanding 16.2x FYE Aug 07 PER and 15x FY08 PER.

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SPH - JPM
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11 Jul 07

Strong core publishing growth + strong investment income

3Q07 results exceeded our expectations. SPHs 3Q07 revenue and net profit exceeded our expectations by 5% and 45%, respectively, largely due to significant increase from treasury and investment which registered a 139% Y/Y growth. Operationally, the results also exceeded our forecast by 10%. We see this as a strong set of results that warrants a re-rating of the stock.

Double-digit growth in core ad revenues. On a Q/Q basis, the company reported 17.3% growth in newsprint and magazine revenue and a 45.2% increase in PBT. The strong growth is fueled by positive economic outlook and healthy circulation of SPHs publications. Prudent cost management has kept margins at a healthy level.

Positive catalysts for SPH in the next few quarters. We see positive catalysts coming from: (1) stronger-than-expected ad revenue growth in the coming quarters, (2) maiden earnings recognition from its property development project, Sky@eleven, and (3) higher revaluation and rental revisions at Paragon.

Raise our numbers to factor in stronger ad revenue growth. We have raised our FY07E/08E/09E earnings by 9%/25%/56%, factoring: (1) higher ad revenue growth to hit 10%, (2) higher investment income in FY07-09E, and (3) higher property contribution from Sky@eleven. We upgrade SPH to Overweight with a June-08 price target of S$5.50 based on sum-of-the-parts valuation. Key risks to our PT include: (1) ad revenue growth, (2) increases in global newsprint prices, and (3) rising cost of wages and operating costs for the company.

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12 Jul 07

3QFY07 Results

Singapore Press holdings (SPH) has reported its 3QFY07 results. Overall, net profit declined by 8.7% in the quarter due mainly to exceptional gains of S$69.1m in the corresponding period last year (write-back of impairment losses for Paragon). Excluding this, net profit for the 3QFY07 surged 51.2% y-o-y to S$159.4m.

The strong results, which were much better than expected were due mainly to:

Print revenue for the quarter increasing by 10.5% y-o-y to S$195.8m, exceeding our expectations of 4% (AC Nielsen projected 14%). Newspaper & magazine revenue for the quarter as a whole increased by 7.8% to S$255.7m.

Revenue from property for the quarter increased 6.6% y-o-y to S$26m. SPH has yet to recognise contributions from the Sky@eleven at this point in time.

Total staff costs and newsprint costs for the quarter increased by 8.6% and 1.4% respectively. Due to the greater increase in revenue as compared to costs, profits before investment income in 3QFY07 increased 15.2% y-o-y to S$108.8m.

Investment income for the quarter increased 139.1% to S$75m due to net profit on the sale of investments and profit from the capital reduction exercise by MobileOne.

We maintain our BUY recommendation on SPH based on our sum-of-the-parts valuation. Falling newsprint prices, Paragons rising rentals and maiden earnings contributions from Sky@eleven and a high net dividend of 5-6% underpin SPHs fundamentals.

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SPH reports Third Quarter Net Profit of $160 million.

SINGAPORE, 11 July 2007 Singapore Press Holdings Limited (SPH) today reported its results for the third quarter ended 31 May 2007. The Group registered a 15.2% increase in operating profit of $14.3 million to $108.8 million.

Profit before exceptional items was up 48.3% to $186.1 million. Net profit was $159.8 million compared to previous years $174.6 million which included an exceptional gain of $69.1 million.

The Groups operating revenue rose 8.4% to $288.1 million. Newspaper and Magazine operations increased 7.8% to $255.7 million on the back of strong growth in print advertisement revenue which saw a surge of 10.4% to $195.6 million. Property operations posted a 6.6% revenue increase to $26.0 million. Total operating expenses increased by 5.0% to $182.2 million. This was due mainly to staff costs which were 12.0% higher as a result of variable bonus provision, increased headcount and annual salary increment. Variable bonus provision was in line with the Groups higher operating profits and the Groups new performance-based incentive scheme. Total headcount in May 2007 was 3,684 compared to 3,583 a year ago because of the acquisition of new subsidiaries and staffing for new media businesses.

Group investment income was up 139.1% to $75.3 million. This comprised mainly net profit on sale of investments and profit from a capital reduction exercise by MobileOne Limited.

For the nine months ended 31 May 2007, the Group registered a 6.9% increase in operating profit* of $19.5 million to $300.1 million. Profit before exceptional items was up 25.3% to $440.1 million. Net profit was $380.1 million compared to previous years $357.6 million which included an exceptional gain of $69.1 million.

Commenting on the outlook for the rest of the financial year, Mr Alan Chan, Chief Executive Officer of SPH said: Print advertising looks promising as the economy is doing well. Paragon is generating healthy rental yields amidst strong sentiments in the property market. The Group is strengthening its presence on various new media platforms and extending its reach beyond the core newspaper business. Barring unforeseen circumstances, the Directors expect the Group to perform better than last financial year.


-- Edited by tfwee at 22:08, 2007-07-11

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29 Jun 07

SPH's Paragon revalued at $1.82b

Company to absorb GST hike for its publications

SINGAPORE Press Holdings' main property asset, Paragon, has been revalued at $1.82 billion. This is higher than the valuation of $1.52 billion the media group disclosed in July last year when it announced its results for the third quarter of FY2006.

The latest valuation of the retail and office complex at prime Orchard Road was carried out by Knight Frank. The valuation of Paragon, done on an annual basis, is required under the terms of the bank loan for the property.

While Paragon was once identified as a non-core asset, SPH has said in recent times that it is committed to holding on to the property for the foreseeable future. The complex enjoys full occupancy, and yielded about 9 per cent return on equity, according to SPH's latest annual report. The group has made efforts to enhance rental yields from the complex.

Separately, SPH said it will absorb the Goods and Services Tax (GST) hike of 2 per cent for its suite of newspapers and magazines. Cover prices of its publications will remain unchanged from July 1, 2007. SPH has a stable of 14 newspapers in four languages and over 90 magazine titles in Singapore and the region. The additional cost to SPH of absorbing the 2 per cent GST hike is estimated to be about $4 million a year.
SPH shares rose six cents to $4.64 yesterday. The group will release its financial results for the third quarter ended May 2007 on July 11.

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20 Jun 07

Positive AdEx numbers

Latest May AdEx figures very encouraging for SPH. AC Nielsen released their May 2007 advertising expenditure figures, which indicate that SPHs newspaper display advertising volume rose by 20.1% y-o-y in the month - registering the strongest May AdEx volume in ten years. In total, SPHs display ad volume for the first nine months of FY07 rose by 10.2% y-o-y. In comparison, Todays AdEx revenues grew by just 4.2% y-o-y in May (Flat growth for Sep-May). For Singapore, total newspaper AdEx grew by 18.7% in January and 8.7% for Sep-May.

SPH is attractive as a good proxy for the domestic economy. We believe that the core publishing business should continue on its rebound path, on the back of strong consumer sentiment, high employment and more residential property launches. At the same time, higher retail rents should aso lead to a higher yield and thus valuation for Paragon. The Groups nvestments are also benefiting from a firm equities market.

Maintain BUY, TP S$5.25 We have a 12-month target price of S$5.25 based on sum-of-parts valuation. This can be broken down into S$3.65 for the core Newspaper business, S$1.26 for SPHs properties and S$0.72 for the Groups cash and investment holdings, less debt of S$0.39. Our target price implies upside of c. 20% and a prospective net yield of over 5.5%.

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Extracted from DBS Vicker Securities

SPH ($4.38)   A lease of life for index laggard (Trading Buy)

SPH is a laggard among the index blue chips. The stock is still trading below its YTD high of $4.76 on January 30th, during which the STI had ascended more than 14% from 3130 to 3580.

Still, DBS Research sees value in the stock. 1H07 earnings were above expectations. Earnings growth is underpinned by an improving publishing business, higher retail property rental income and gradual recognition of revenue from the highly successful Sky@Eleven project.

There are 2 potential catalysts for the stock to rise during this period:

1. The Great Singapore Sale from 25th May to 22nd July should translate to higher advertising revenue during this period.

2. Revaluation of its commercial property Paragon during end-June. Commercial property price set a new benchmark earlier this month after Far East Organization sold a floor at the 99-yr leasehold Central for S$2850 psf of net lettable area to a local fashion trading company.

Paragon has a total NLA of 608,864 sq ft of which 425,393 sq ft consists of retail space with the remaining 183,471 sq ft as office space. DBS Research currently values Paragon at S$1652.5mil, or $2714 psf.

In addition, the rise in commercial property prices should also translate into higher rental income for SPH.

The chart above shows that during the past 2 years, SPH shares have a tendency to reverse into an up trend during the month of June. Technically, the weekly stochastics is oversold, the daily MACD is turning up and strong support is seen at the 200-day moving average at $4.33.

SPH shares currently offer an ample 20% upside to our research target price of $5.25. Interest in the stock could be rekindled by the revaluation of Paragon and higher advertising sales.

Technicals point to an upturn. Thus, we recommend a Trading Buy on SPH.



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tfwee


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SPH, uob kay hian remains a BUY

  • Page-counts suggest 4% advertising revenue growth in 3QFY07. Our pagecounts of the Straits Times suggests a 4% advertising revenue (AR) growth in 3QFY07. Recruitment and classified AR grew by 12% and 5% respectively while display AR grew by 3%. Stronger AR growth was sustained into 3QFY07. SPH had earlier reported a display AR growth of 4% in 2QFY07 compared with a contraction of 1% in 1QFY07 and 3% in FY06. Newspaper AR had earlier posted an overall growth of 4% in 2QFY07 compared with 2% in 1QFY07. Management had said SPH was registering higher ad demand in the education, retail and property sectors.
  • Newsprint prices continued to trend downwards in May and Jun 07. Newsprint prices have been falling after peaking at US$642/tonne in Aug 06 and currently stand at US$582/tonne. For every 10% decline in newsprint prices, SPH's FY07-09 group net profit would increase by 2%. The growing threat of newsprint from China entering key US markets amid continued weak newsprint consumption in North America has shifted pricing power to buyers. The run-up in newsprint prices over the last four years had been entirely driven by newsprint capacity shutdowns in North America. Producers have run out of easy mill shutdowns in North America and future output curtailment will become increasingly difficult.
  • Revaluation of Paragon in June could cause some excitement. SPH's prime property asset, Paragon Shopping Mall at Orchard Road, is due for its annual revaluation in June. The last revaluation in Jun 06 by Knight Frank was S$1.52b. Our sum-of-the-parts (SOP) valuation of S$4.90/share for SPH has incorporated a 10% increase on last year's valuation.
  • An opportune moment for a short trade. Traditionally, SPH's share price sees a strong rally from late-Sep to mid-Oct in anticipation of the final dividend. We forecast a final DPS of 19.0 cts (interim DPS: 7.0cts) or 4.4% net yield based on current share price. We see the next four months as an opportune moment for investors who are interested in a short trade in SPH. Core fundamentals are supported by falling newsprint prices, Paragon's rising rentals and upcoming revaluation, maiden earnings contributions from the Sky@eleven property project and high net dividend yield of 6-7% over the next three years.


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KK


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8 Jun 07

Lagging the market

- SPH has been consolidating over the last 2 months within a descending triangle formation. This is looked upon as a bearish formation.

- However, should the 200-day moving average provide sufficient support for SPH after yesterday's price break below the support of the triangle, we could witness a strong rebound.

- The stochastic indicator is currently within oversold regions, hence should the support at the 200-day moving average hold, SPH could very likely stage a rebound in the days ahead.

- A break and close above the top channel of the descending triangle would be a confirmation investors would require to go long on SPH. A break upwards would take SPH towards the 1st resistance at S$4.42.

- Subsequent resistance at S$4.76 and support zone maintained between S$4.20 - 4.30.

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KK


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2-May-07

Paragons revaluation could cause some excitement

Newsprint price decline has breached the US$600/tonne mark. Newsprint prices have been falling since August last year after peaking at US$642/tonne. Prices breached the US$600/tonne mark in April and currently stand at US$595/tonne. For every 10% decline in newsprint prices, SPHs FY07-09 group net profit would increase by 2%. The growing threat of newsprint from China entering key US markets amid continued weak newsprint consumption in North America has shifted pricing power to the buyers. The run-up in newsprint prices over the last four years had been entirely driven by newsprint capacity shutdowns in North America. Producers have run out of easy mill shutdowns in North America and future output curtailment will become increasingly difficult.

However, advertising revenue growth remains unexciting. According our page-counts of The Straits Times, advertising revenue (AR) growth was strong at 8% yoy in March. However, this was subsequently eroded by Aprils decline of 4% yoy. As a result, overall AR growth in the last two months was a marginal 2%. Display AR growth was flat while recruitment and classified AR grew at 9% and 3% respectively.

The revaluation of Paragon in June could cause some excitement. SPHs prime property asset, Paragon Shopping Mall at Orchard Road is due for its annual revaluation in June. The last revaluation in June last year by Knight Frank was S$1.52b. Our sum-of-the-parts (SOP) valuation of S$4.91/share for SPH has incorporated a 10% increase on last years valuation.

Maintain BUY and target price of S$5.00 in view of falling newsprint prices, Paragons rising rentals and its upcoming revaluation, maiden earnings contributions from Sky@eleven property project and SPHs high net dividend yield of 6-7% over the next three years.

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12 April 2007

Singapore Press (SPRM.SI)
Buy: 2Q FY07 Profits Jump 28% on Higher Investment Income and Tax Write-back

Boosted by investment gains and lower taxes 2Q07 net profit grew 28% to S$108m, boosted by higher gains from the sale of investments and a deferred taxwrite- back of S$6.3m.

Core media revenues rose 4%, in line Media revenues grew by an encouraging 4% (vs. 2.1% in 1Q FY07) as display ad revenues grew 4.3% (vs. a decline of 1.3% in 1Q07); classified ads decelerated to 3.2% (vs 7.9% in 1Q07). The improvement in display ads reflects increased ad spend by advertisers, especially in the education, property and transport segments. Classifieds decelerated due to the high base achieved over the past year.

Paragon saw a 9% rise in revenues Operating profit from property grew 13% as margins expanded with higher rental reversions at the Paragon.

Newsprint costs contained but staff costs rose 11% Newsprint costs rose 2.3% as prices moderated. Staff costs jumped 11% for the quarter due mainly to bonus provisions made as the group shifted to a new staff compensation scheme. Management continued to guide for 5% wage increases although total costs would be boosted by increased head count.

Reiterate Buy/Low Risk With encouraging growth in display ad revenues, SPH looks attractive relative to our sum-of-parts value of S$5.35, and has a high net dividend yield forecast of 5.4%.


Buy/Low Risk 1L
Price (12 Apr 07) S$4.60
Target price S$5.35
Expected share price return 16.3%
Expected dividend yield 5.4%
Expected total return 21.7%
Market Cap S$7,289M
US$4,801M

-- Edited by tfwee at 22:22, 2007-04-15

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13-Apr-2007

Investments gives SPH bottomline a boost

Core operations chugs along. SPH reported its 2Q07 results yesterday with operating income growing 4.9% YoY to S$253.7m but with net profit spiking 27.9% YoY to S$108m. The significant spike in net profit was due to good returns from equity investments which rose 61.7% YoY to S$31.6m and a tax write back of S$6.3m. Stripping out investment income, core operating profit turned in a flat 1% YoY growth to S$83.9m, in line with our expectations.

Ads grow with economy. Going into 2H07 with the economy expected to continue to grow robustly, advertisements for consumer spending and property launches are likely to continue to grow. We see this positive market sentiment to likely benefit SPH media and print business. Indeed management indicated that the retail, education, telco and transport sector contributed healthily to the Ad revenue in 2Q07. In light of the positive outlook we have revised up our FY07 and FY08 Ad growth to 3.5% YoY and 2.8% YoY (from 2.3% and 1.4% respectively).

Costs rise as anticipated. Over the period concerned, SPH's operating costs rose 7.2% YoY to S$164.5m. Staff costs contributed most to this with a 11.1% YoY spike. This was due to new hires for New Media initiatives, bonus payouts and salary increments. In 2Q07 cost to revenue ratio stood at 65% (vs 63.5% in 2Q06 and 59% in 1Q07) and we expect operating cost to continue at this level for 2H07. Management has assured that measures are being taken to implement "revenue enhancing" workflows to improve organisational efficiencies.

Maintain HOLD. For 2H07, although we are likely to see bottomline accretion from Sky@Eleven (TOP in 2010), we have already factored it into our valuation. We think that SPH's FY07 net dividend yield of about 5% gives investors reasonable downside protection going into a traditionally more volatile part of the year. In view of our revised assumptions on Ad growth, our FY07 and FY08 net profit from core operations (excl condo sales) is now S$417.3m and S$393.6m up 5% and 2.1% respectively. We thus raise our fair value to S$4.60 (previously S$4.44) but maintain our HOLD rating.

-- Edited by KK at 22:09, 2007-04-13

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13-Apr-2007

2QFY07: Display ad revenue growth recovered

SPH reported net profit of S$108.0m (+27.7% yoy) for 2QFY07 (Dec 06 to Feb 07). 2QFY07 results were better than expected on strong investment income(+62% yoy) and a deferred tax write-back of S$6.3m because of a change inSingapores corporate tax from 20% to 18%. 2QFY07 EBITDA grew marginallyby 1.5% yoy. SPH has declared an interim tax-exempt 1-tier tax DPS of 7cts.

Finally, there was recovery in display ad revenue growth, which registered 4.3%in 2QFY07 compared with a contraction of 1.3% in 1QFY07 and 3.0% in FY06.Newspaper advertising revenue posted an overall growth of 3.9% in 2QFY07compared with 2.1% in 1QFY07. Management said SPH saw higher ad demandin the education, retail and property sectors. The property segment posted 8.0%growth in revenue, underpinned by positive sentiments in the property market.Other operating revenue from other segments registered a 44% improvementover last year due to contributions from Internet, radio broadcasting and outdooradvertising businesses.

Materials, consumables and broadcasting costs in 1HFY07 were higher by 4%,mainly as a result of increased newsprint costs (+2%) arising from higherconsumption and increased production costs (+10%) in line with highermagazine circulation sales. Average newsprint cost is US$606/tonne in 3QFY07vs. US$602/tonne in 1QFY07. Management is guiding an average cost ofUS$610/tonne for full year FY07, but has signaled that newsprint prices areexpected to soften because of additional newsprint supply from new millscoming onstream in China. Current spot prices for standard newsprint are atUS$570/tonne. Staff costs rose 7% to S$141.8 million mainly due to annualsalary increment as well as increases in staff variable bonus provision andheadcount. Total headcount at end-Feb 07 was 3,628 compared to 3,472 a yearago mainly due to the inclusion of headcount relating to new subsidiaries as wellas new print and online initiatives. Other operating expenses increased by 4%mainly due to higher distribution costs as well as increased costs from theinclusion of new subsidiaries and SPHs ventures into new media businesses.

We have tweaked our earnings forecasts marginally. Maintain BUY on SPH onfalling newsprint prices, higher property earnings from Paragon coupled withmaiden contributions from Sky@eleven property development project and a revaluation of Paragon in Jun 07. We maintain our target price of S$5.00(estimated sum-of-part valuation: S$4.91/share). Net dividend yield is forecastat 5.6% to 6.5% over the next three years.

-- Edited by KK at 10:38, 2007-04-13

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13-Apr-2007

Robust Interim Results

Higher investment income and lower taxes boost earnings. As at 1H07, income from investments rose by 57% y-o-y to S$61.3m, led by a buoyant Singapore equities market. A tax credit of S$6.3m for overprovision of tax and a lower tax rate also helped bring down taxes by 21% y-o-y. The core businesses of publishing and property also performed well, with PBT up by 2.4% y-o-y and 15.1% y-o-y respectively.

Outlook remains firm on all fronts. We believe that the core publishing business should continue to grow modestly, on the back of strong consumer sentiment, high employment and more residential property launches. At the same time, higher retail rents should also lead to a higher yield and thus valuation for Paragon. The Groups investments are also benefiting from a firm equities market. We have made slight changes to our forecasts to factor in higher staff costs and higher investment income.

Raised valuation for Sky@Eleven. Taking into account an average selling price of S$975 psf versus our previous assumption of S$850 psf for this project, we have raised our RNAV for Sky@Eleven by c. 5cts per SPH share. We have also adjusted the recognition of revenue for this project to 15% for FY07 and 35% for FY08 from 30% and 40% respectively previously. Sky@Eleven is expected to T.O.P. around end 2009 to early 2010.

Maintain BUY, TP S$5.25 We have a 12-month target price of S$5.25 based on sum-of-parts valuation. This can be broken down into S$3.65 for the core Newspaper business, S$1.26 for SPHs properties and S$0.72 for the Groups cash and investment holdings, less debt of S$0.39.

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RE: SPH
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Extracted from Asia1



SPH reports 28 per cent rise in Q2 net profit

Apr 12, 2007
 

Media group Singapore Press Holdings Limited (SPH) today announced a net profit increase of 27.7 per cent to $108 million from $84.6 million in the corresponding quarter last year.

The Group registered profit before investment income of $84 million, compared to $83.1 million a year ago.

Its operating revenue also grew 4.5 per cent to $250.6 million. Revenue for the Newspaper and Magazine operations rose four per cent to $218.1 million, driven mainly by the 4.6-per-cent rise in print advertisement revenue to $161.6 million and the 2.1-per-cent growth in circulation revenue to $51.2 million. Property segment posted an increase in revenue of nine per cent over last year to $27.3 million.

Total operating expenses grew by by $11.1 million or seven per cent to $169.7 million due mainly to rising staff costs, which went up by $7.3 million (11.1 per cent) because of annual salary increment and increases in staff variable bonus provision and headcount.

The increase in staff costs was in line with the Group's ongoing efforts to ensure that staff salaries remain competitive and to motivate them to excel in their performance.

Total headcount as at end February 2007 was 3,628 compared to 3,472 a year ago, with the inclusion of headcount relating to new subsidiaries as well as new print and online initiatives.

Materials, consumables and broadcasting costs, depreciation as well as other operating expenses were higher by $1.2 million (2.9 per cent), $0.7 million (5.8 per cent) and $1.9 million (5.3 per cent) respectively in line with increased business activities.

Group investment income improved 61.7 per cent to $31.6 million against $19.5 million last year as a result of higher profit on the sale of internally-managed investments and higher gain from externally-managed investments.

For the half year ended Feb 28, the Group registered profit before investment income of $191.3 million compared to $186.2 million a year ago while net profit rose 20.4 per cent to $220.3 million from previous year's $183 million.

The profits for Sky@eleven, the exclusive freehold condominium project of the Group, will be recognised using percentage-of-completion method over the life of the project and disclosed accordingly.

Commenting on the outlook for the rest of the financial year, Mr Alan Chan, chief executive officer of SPH, said: "Positive business and consumer sentiments are expected to continue providing good support to sustaining the Group's print advertisement revenue. "With ongoing efforts to boost readership of the Group's publications, circulation sales are expected to remain at sustainable levels. Paragon is expected to ride on strong sentiments surrounding the property market and continue to generate healthy rental yields. Barring unforeseen circumstances, the Directors expect the recurring earnings for the current financial year to be satisfactory."

The Directors have declared an interim dividend of seven cents per share, which will be paid on May 15. These dividends are on tax-exempt one-tier basis.



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KK wrote:

Fm SGX,

Singapore Press Holdings Limited wishes to announce that it will release its financial results for the Second Quarter/Half-Year ended 28 February 2007 on Thursday, 12 April 2007.

Comments : For reference, 1H06 div was 7cts and EPS 11cts. So far, Q107 EPS was 7cts and on the back of better ADEX this year, I'm expecting 1H07 to be better than 1H06 and thus, 1H07 div to be better than last year. I predict 8-10cts :D


15. Dividends
(a) Current Financial Period Reported On

Name of Dividend: Interim Dividend
Dividend Type: Cash
Dividend Rate: 7 cents per share
Tax rate: Tax exempt (One-tier)

(b) Corresponding Period of the Immediately Preceding Financial Year
Name of Dividend: Interim Dividend
Dividend Type: Cash
Dividend Rate: 7 cents per share
Tax rate: Tax exempt (One-tier)

(c) Date payable The date the dividend is payable: May 15, 2007

(d) Books closure date The Share Transfer Books and Register of Members of the Company will be closed on May 3, 2007 for preparation of dividend warrants. Duly stamped and completed transfers received by our Share Transfer Office, Barbinder & Co Pte Ltd, 8 Cross Street, #11-00, PWC Building, Singapore 048424, up to 5 p.m. on May 2, 2007 will be registered to determine shareholders' entitlements to the interim dividend. In respect of shares in securities accounts with The Central Depository (Pte) Limited ( CDP ), the said interim dividend will be paid by the Company to CDP which will distribute the dividend to holders of the securities accounts.

Comment: KK's Predication is very close. SPH is giving 7 cents dividend. Slightly lower than your predication.



-- Edited by tfwee at 18:55, 2007-04-12

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SPHFY07Q2 Results
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12. Review of Results for the Half Year ended February 28, 2007

12.1 Group operating revenue grew 4.3% against last year to S$522.7 million. Revenue for the Newspaper and Magazine segment rose by 3.3%, mainly driven by the 3.6% increase in print advertisement revenue to S$345.2 million and 1.8% growth in circulation revenue (after absorption of S$5.0 million in GST) to S$102.9 million. Property segment posted 8.0% increase in revenue over last year to S$52.9 million underpinned by positive sentiments in the property market. The Group s operating revenue from other segments registered a 43.7% improvement over last year to S$10.3 million, due to contributions from Internet, radio broadcasting and outdoor advertising businesses.

12.2 Materials, consumables and broadcasting costs were higher by S$3.3 million (4.0%) mainly as a result of increased newsprint costs (2.3%) arising from higher consumption and increased production costs (9.7%) in line with higher magazine circulation sales. Staff costs were up by S$9.1 million (6.9%) to S$141.8 million mainly due to annual salary increment as well as increases in staff variable bonus provision and headcount. The increase in staff costs was in line with the Group s ongoing efforts to ensure that staff salaries remain competitive as well as to incentivise and motivate staff to excel in their performance. Total headcount at end February 2007 was 3,628 compared to 3,472 a year ago mainly due to the inclusion of headcount relating to new subsidiaries as well as new print and online initiatives. Depreciation charges rose by S$1.9 million (8.0%) mainly due to replacement of existing assets and commissioning of new editorial and other systems. Other operating expenses increased by S$3.0 million (4.2%) mainly due to higher distribution costs as well as increased costs from the inclusion of new subsidiaries and the Group s ventures into new media businesses.

12.3 Consequently, profit before investment income at S$191.3 million was 2.8% higher than last year.

12.4 Group investment income at S$61.3 million was S$22.3 million (57.1%) higher than last year mainly as a result of higher profit on sale of internally-managed investments and a capital reduction exercise undertaken by an investee company.

12.5 The Groups share of profits of associates and jointly controlled entities comprised mainly of our stake in the results of MediaCorp Press and MediaCorp TV Holdings.

12.6 Taxation charge of S$33.6 million was arrived at after accounting for tax on the taxable income at the corporate tax rate of 18% and adjusting for prior years  overprovision in deferred taxation of $6.3 million due to the change in corporate taxation rate from 20% to 18%.

12.7 Consequently, net profit rose 20.4% to S$220.3 million compared to S$183.0 million in the corresponding period last year.


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SPH - BT
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Published April 5, 2007

SPH, CapLand Retail to offer new avenue for advertisers

Strategically placed screens will keep shoppers updated about special offers

(SINGAPORE) Shoppers will soon be able to get the latest news and hot buying tips from a network of more than 100 interactive screens in 10 malls across the island - thanks to a joint venture between Singapore Press Holdings MediaBoxOffice (SPH MBO) and CapitaLand Retail.

The strategically placed 42-inch screens - to be introduced in phases from this month - will keep shoppers in the know about special offers and mall promotions. And because the screens will be linked as a network, advertisers will benefit from greater simultaneous reach to shoppers islandwide.

When the interactive capabilities are fully on, the screens will be able to transmit information such as shop location, discount coupons and gift vouchers to shoppers' mobile phones, SPH MBO said in a statement. The screens will also broadcast the latest news from SPH newsrooms.

CapitaLand Retail chief executive Pua Seck Guan said yesterday: 'There is a need to embrace shoppers and tenants in the new digital age. There is a constant need to explore new avenues to improve the shopping experience. SPH MBO chairman and SPH executive vice-president of marketing Leslie Fong said: 'The tie-up with CapitaLand Retail is the first of many more partnerships with major shopping centres and retailers. We are constantly on the lookout for new technologies in outdoor media advertising. Advertisers can look forward to more new platforms from us to reach out to their target audience.'

Shoppers can soon try the interactive screens at seven CapitaLand Retail malls: Plaza Singapura, Funan DigitaLife Mall, Junction 8, Tampines Mall, Lot One, Bukit Panjang Plaza and Clarke Quay. The remaining three - Rivervale Mall, Bugis Junction and IMM - will be added later.


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SPH
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Fm SGX,

Singapore Press Holdings Limited wishes to announce that it will release its financial results for the Second Quarter/Half-Year ended 28 February 2007 on Thursday, 12 April 2007.

Comments : For reference, 1H06 div was 7cts and EPS 11cts. So far, Q107 EPS was 7cts and on the back of better ADEX this year, I'm expecting 1H07 to be better than 1H06 and thus, 1H07 div to be better than last year. I predict 8-10cts :D

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SPH - CitiGroup
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22-Mar-2007

Buy: Benefiting From Economic Recovery

Domestic economy fuelling ad spend — Management agreed that the recovery in domestic consumption and a buoyant job market is underpinning a recovery in ad revenues at SPH. The company noted that the recovery in the housing market is also starting to stir an increase in classifieds for HDB resale flats.

Costs well contained — Even though the job market is tightening and adding pressure on wages, SPH’s wage costs remain well contained. In addition, the group noted a softening in newsprint prices, which should help contain costs.

Higher building material costs will have little impact on the margins at Sky@eleven — The group is close to awarding the construction contract for its Sky@eleven project. Management indicated that the rise in material costs should not significantly affect the margins for the project. We forecast a net profit of S$404m from this project.

Paragon benefiting from strong demand for retail and medical suite space — The Paragon continues to see the benefit of strong rental reversions with strong demand for both its retail and office space. This should underpin further appreciation in the valuation of the property.

Attractive valuation trading below sum of parts of S$5.35 — We reiterate our Buy/Low Risk recommendation given an improving earnings profile, attractive valuation and a net yield of 7% for FY08.

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SPH - UOBKayHian
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16-Mar-2007

Brighter outlook ahead

Newsprint price decline is gathering momentum. Newsprint prices have decisively turned the corner and fallen by 5% from US$640/tonne in Aug 06 to the current level of US$605/tonne. The growing threat of newsprint from China entering key US markets amid continued weak newsprint consumption in North America has shifted pricing power to the buyers. The run-up in newsprint prices over the last four years had been entirely driven by newsprint capacity shutdowns in North America. Producers have run out of easy mill shutdowns in North America and future output curtailment will become increasingly difficult.

The positive impact of falling newsprint prices on SPH will be felt from 4QFY07 onwards. The company’s newsprint cost lags spot prices by 6-9 months in view of its newsprint inventories. We now assume SPH’s newsprint cost to average US$600/tonnem US$570/tonne and US$550/tonne in FY07, FY08 and FY09, respectively. Given its bulk purchases, SPH generally buys its newsprint requirements at prices below spot prices. Newsprint cost accounts for 20% of SPH’s total operating cost (excluding the cost of its one-off property project Sky@eleven). For every 10% decline in newsprint prices, FY07–FY09 group net profit would increase by 2%.

Sky@eleven to boost earnings…. SPH has sold all the 273 units of its 43-storey Sky@eleven property project off Thomson Road at an average price of S$975psf, with the highest price recorded at S$1,200psf. With a gross floor area of 660,000sf, SPH said total sales value totalled more than S$650m. We are assuming this will be recognised over the next three years. Assuming an average construction cost of S$300psf, our earnings forecasts have factored in contributions from this project at S71m, S$121m, S$121m and S$50m for FY07, FY08, FY09 and FY10, respectively. Discounting the total property development earnings of S$363m at a WACC of 7.5%, we have incorporated the project's DCF at S$305.5m in our sum-of-parts (SOP) valuation for SPH.

. while SPH waits for a recovery in advertising revenue growth. We reckon advertising revenue (AR) continues to be at pedestrian pace of 3-4%. Our page-counts of The Straits Times are suggesting a marginal stronger AR growth of 4% in 2QFY07 (Dec 06 to Feb 07). In 1QFY07 (Sep 06 to Nov 06), SPH registered an AR growth of 2%. In view of a slower global economy in 2007 and possibly in 2008, we do not expect a pick-up in AR growth in the medium term. AR growth will likely receive a boost as we draw near to the completion of Singapore’s two integrated casinos in 2009.

Defensive in times of uncertainty. We upgrade SPH from HOLD to BUY. With falling newsprint prices, earnings growth on the back of contributions from Sky@eleven and forecast net dividend yield of 6-7%, sentiments on the stock should improve. Although a one-off project, the development of Sky@eleven is effectively unlocking one of SPH’s non-core assets at a higher value-add compared with an outright asset sale. Our target price is S$5.00 for SPH is premised on our sum-of-the-parts valuation of S$4.98/share. We have raised our FY07, FY08 and FY09 earnings forecasts marginally by 1-2% on the back of lower newsprint cost and a lower corporate tax proposed by Singapore’s recent annual budget. SPH’s 1HFY07 results will be released in early-Apr. These should be accompanied by an interim dividend. Traditionally, the stock sees a rally in September in the run-up to the release of the company’s final results in anticipation of the year’s final dividend. Based on our forecast net DPS of 26.0 cts (6% of share price), the effective net yield during the next 6-month period could be as high as 12%. We see this an excellent return in the immediate future.

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SPH - OCBC
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14-Mar-07

Dividend play for a shaky market

Dividend play in shaky markets. Although the Sky@Eleven condo project was well received, we do not expect any other major kickers in SPH's 2007 earnings. We expect SPH to continue to retain its good net profit margins of >35% (excluding exceptionals) and bank on the relative stability of its print business which trails Singapore's economic performance. Assuming a similar payout ratio as previous years, we estimate that the stock's dividend yield could be 5% in FY07, making SPH an attractive defensive play especially in the current uncertain market.

Muted sentiments for 1H07. Recent surveys in Feb 07 showed that business sentiment for the manufacturing and service sectors were less optimistic. For the manufacturing sector, an EDB survey showed a net positive sentiment rating of +7% (for 1H07), down sharply from +22% (for the period covering 4Q06 to 1Q07). In the services sector, the Dept of Stats showed a net +18% of the 1200 firms polled are upbeat over 1H07 business sentiment, flat when compared YoY. Recent comments by ex Fed Chairman, Alan Greenspan, expressing concerns of recession in the US, have also brought a cautious undertone into the market.

Operationally positive, but unexciting. For 2007, although SPH continues to be cash generative and enjoy near monopoly status in Singapore, we do not expect SPH's core newspaper and media business to rebound strongly. Synergising its new strategic investments in the internet arena are also not expected to contribute in a meaningful way any time soon. We forecast print revenues to grow a marginal 2.2% YoY in FY07.

2Q07 a test for cost controls. SPH's 1Q07 operating costs made up 58.9% of total revenue, down from 4Q06's 66.9%. However, we note that SPH's 1Q06 costs were similarly low, but ballooned again for the rest of FY06. We expect material costs to increase with oil prices around US$60/barrel and staff cost to rise in tandem with the tight labour market. 2Q07 will be an indicative test of SPH's efficacy in cost control implementation.

Maintain HOLD. Previously, positive sentiments about its one-off property venture and better economy prospects boosted its stock price performance. However, cooling US and China economies have introduced uncertainty in the market. We think that SPH's FY07 net dividend yield at about 5% gives investors reasonable downside protection. We maintain our HOLD rating with fair value of S$4.44.

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SPH - CIMB
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13-Mar-2007,

Old-school workhorse still packs a punch

• Newspaper adex recovery at the expense of TV and Today. AC Nielsen statistics show that SPH’s newspaper adex grew 14.7% yoy in Jan 07. 5MFY07 growth was 7.8% yoy, against our assumption of 5% yoy growth for FY07. TV and Today’s advertising either contracted or stayed sluggish during the period.

• Classified segment is the old-school workhorse used to drive readership. We believe that SPH’s newspaper circulation hinges on its classified segment. This segment has been benefiting from job, secondary property market, auto and services advertisements. Since no competitor has the capacity to produce comparable Classified ad segments, SPH’s newspapers should continue to enjoy healthy circulation despite the entry of free newspapers.

• Positives from corporate tax cut and GST hike. This year’s 2%-pt cut in corporate tax rates will be positive for the group’s earnings. Also, the group may pass on the 2%-pt GST hike in Jul 07 to readers, having already absorbed previous rounds of GST rate hikes. We earlier factored in a 2%-pt GST hike in our cost forecasts for SPH. On our new assumption that the hike would be passed on to readers, we now expect total savings of S$4.3m each year from FY07-09, on top of tax savings.

• Maintain Outperform; target price raised to S$5.22. Factoring in savings from the corporate tax cut and the passing on of the GST hike, we have raised our FY07-09 earnings estimates by 0.1-4.2%. Based on sum-of-the-parts valuation, our target price has been lifted from S$5.16 to S$5.22. Maintain Outperform.

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SPH - OCBC
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7-Mar-2007

A strong rally awaits SPH upon reaching support

- Elliot wave counts indicate SPH is currently in a corrective wave (Wave B).

- Bearish candlestick formations, coupled with rising volume on the price decline over the last week, signal more downside ahead for SPH. However, we can expect a mild rebound after the sell down over the last few days.

- Having sliced through the 50- and 100-day moving averages, we anticipate SPH to remain subdued over the next 5-10 trading days. However, we do not expect its negative sentiment to drag on into a medium-term time frame. This as the 10-day moving average is still holding well above the 200-day moving average, signaling that the underlying sentiment for the medium term is still bullish. Unless we witness the 10-day moving average cut below the 200-day moving average, we remain positive on the mediumterm outlook.

- Observing the RSI trend behavior over the last 3 years since 2003 to date, we noticed a common occurrence every time the RSI crossed below 32%. There were 9 instances after the RSI fell below 32%, SPH would bounce back approximately 5-10 days later. The smallest gain out of the 9 rebounds was approximately 5% and the largest was 28%. We just witnessed the RSI slip below 32% on 5th Mar and we expect it to slide lower before it reverses in the next 5-10 trading days

- We foresee SPH falling into the support zone at S$4.00 - 4.10, after which we will witness a rally. 1st resistance set at S$4.42 and 2nd resistance set at S$4.76

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SPH - DBS
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22-Feb-2007

Robust Jan AdEx Growth

2007 January AdEx Figures. AC Nielsen released their January 2007 advertising expenditure figures, which indicate that SPH’s newspaper display advertising volume rose by 14.7% yoy in the month - registering the strongest January AdEx volume since 2000. In total, SPH’s display ad volume for its first five months of FY07 rose by 7.8% yoy. In comparison, Today’s AdEx revenues grew by just 4% yoy in January (3% yoy growth for Sep-Jan). For Singapore, total newspaper AdEx grew by 13.2% in January and 7.1% for Sep-Jan.

Publishing business should do much better in 2007 than in previous years. We believe that SPH is well on track to meet or even exceed our projected AdEx increase of 3.6% in FY07 (compared to 2.1% in FY05 and 1% in FY06). Thus, earnings from the publishing business could possibly grow by more than the 6% we have projected for FY07.

Maintain BUY, TP S$5.20. We have a 12-month target price of S$5.20, based on sum-of-parts valuation. This can be broken down into S$3.70 for the core Newspaper business, S$1.20 for SPH’s properties and S$0.69 for the Group’s cash and investment holdings, less debt of S$0.39.

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SPH - OCBC
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2-Feb-2007

Property and bullish sentiments drive share price

Sky@Eleven sells out in 30 hours. Singapore Press Holdings (SPH) recently reported that all 273 units at the Sky@Eleven condominium were sold out even before its public launch with an average selling price of S$975 psf and highest price of S$1,200 psf. Unit floor areas ranged from 1,851 to 2,820 sf.

Revaluing Sky@Eleven. We estimate net sellable area (NSA) to be about 633,119 sf and breakeven at about S$221 psf. Previously, we pegged the selling price at S$750 psf. Raising the value to S$975 psf, we estimate SPH could book in pre-tax profit of S$477m. However, as the bulk of the pretax gains is in the form of capital gains from the land, there is a good likelihood that minimal tax is payable on this project. We estimate capital gains of about S$269m, meaning only S$208m could be taxable. As such, net profit to SPH could be as high as S$438m (previously S$311m) or about S$0.27 per share. Overall, the increase in psf price adds about 7 cents to our previous estimate for this site.

Bullish sentiments and cost revision. Although the economy continues steaming ahead, we are still cautious in terms of increasing advert and circulation forecasts. PM Lee also said in this New Year message that the economy would slow in 2007 due to weaker demand in the US. However, we tweak our costs forecasts downwards by half a percentage point to reflect the better costs controls that were shown in SPH's 1Q07. We also factor in the corporate tax cut of 1% and our upward revision of M1's fair value.

Just chugging along. We continue to expect the core media segment to generate a good cash flow but growth will be lukewarm. Sky@Eleven is a once-off project and SPH will need to bank on synergising recent ventures and acquisitions quickly to contribute significantly to the bottomline while managing costs.

Maintain HOLD. Positive sentiment about its one-off property venture and the bullish economy has boosted SPH's stock. Taking into account our remodelling of costs, tax and M1's fair value, we up our fair value from S$4.26 to S$4.44 based on sum-of-parts valuation, revise FY07 net profits up to S$402m (previously S$397m) with net dividend yield at about 4.6%. We maintain HOLD rating on SPH.

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RE: SPH
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 Extracted from Report by Credit Suisse dated 31 Jan 07

● SPH announced on Tuesday morning that it has sold out all 273
units of its Sky@eleven condominium project within 30 hours after
the soft launch.
● The average selling price of S$975 per square foot is 11% higher
than our earlier estimate of S$882. Also, we had not assumed that
the entire project would be sold out in such a short time.
● Accordingly, we have raised our FY07 and FY08 net earnings
forecasts by 6%. However, we have also lowered our FY09 profit
forecast by 7%. Our end-2007 sum-of-the-parts-based target price
increased marginally to S$4.87 per share (from S$4.86). This
represents 4% upside potential from current levels.
● Notwithstanding the limited absolute potential upside of 4%, we
are maintaining our OUTPERFORM rating for SPH in view of the
expected 6% downside for the Singapore market. Coupled with a
projected net dividend yield of 5.3% in FY07E, the stock has total
absolute return potential of 9%, in our opinion.

Sky@eleven sold out in less than 2 days
SPH announced on Tuesday (30 January) morning that it has sold out
all 273 units of its Sky@eleven Thomson Road condominium project
within 30 hours after the soft launch on Sunday evening. The
company added that based on the average transacted price of $975
per square foot, the total revenue is estimated to exceed $650mn.
However, the company is unable to ascertain the total costs of
developing the project pending the finalisation of the construction
tender process, which is expected to be completed by end February.
The book value of the land is S$11mn, and the development charge is
around S$10mn.

Higher than expected selling price; raised our numbers
The average selling price of S$975 per square foot is 11% higher than
our forecast of S$882 per square foot (and within the pricing range of
S$900-1,200 per square foot reported by the press earlier this month).
Also, we had not assumed that the entire project would be sold out in
such a short time. Accordingly, we have raised our FY07 and FY08
net earnings forecasts by 6%. However, we have also lowered our
FY09 profit forecast by 7%. Our end-2007 sum-of-the-parts-based
target price increased marginally to S$4.87 per share (from S$4.86).
This represents 4% upside potential from current levels.

Maintain OUTPERFORM rating
Notwithstanding the limited absolute upside of 4%, we are maintaining
our OUTPERFORM rating for SPH in view of the expected 6%
downside for the Singapore market. Coupled with a projected net
dividend yield of 5.3% in FY07E, the stock has total absolute return
potential of 9%.



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