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Singapore Press Holdings 2QFY8/17 results: down but not out ■ SPH’s 2QFY17 net profit of S$54m missed consensus but met our expectations at 24% of our full-year forecast. ■ It was not a pretty sight for the core media business (newspaper, classifieds and display ads) with its 2QFY17 revenue falling 12% yoy and 17% qoq. ■ The only bright spots were property (PBT up 10% qoq, 18% yoy), associates’ contribution and investment income. ■ Maintain Hold with SOP-based target price of S$3.36 and slight EPS tweaks. The stock offers a 4.8% dividend yield for FY17-19F, with potential for special dividends.
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Soilbuild REIT: Some positives but uncertainties remain Soilbuild Business Space REIT (Soilbuild REIT) reported 1Q17 gross revenue of S$22.0m, representing an increase of 9.2% YoY. DPU fell 4.4% to 1.489 S cents but was within our expectations. There were some positive takeaways from this set of results, as portfolio occupancy rose from 89.6% (as at end-FY16) to 91.8%. From our understanding, Soilbuild REIT has obtained approval from JTC to lease out up to 30% of its 72 Loyang Way property’s GFA to non-oil and gas related tenants. As such, the property’s occupancy came in at 9.9%. While the leasing environment has improved, rental reversions are likely to remain soft. There are also uncertainties as to how quickly Soilbuild REIT will be able to find an anchor tenant for its 72 Loyang Way asset. We make no changes to our forecasts, HOLD rating and S$0.64 fair value estimate. Based on our projections, Soilbuild REIT offers a distribution yield of 8.4% for FY17F. |
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DBS VICKERS |
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mm2 Asia An UnUsUal boost Growth supported by core business and UnUsUal; cinemas to build recurring income. The listing status of 41.9%-owned UnUsUal would help to propel mm2’s growth going forward. UnUsUal can now tap on the equity market for expansion. We project mm2 to grow at an EPS CAGR of 52% from FY16-FY19, underpinned by growth in productions, expansion into the China market, and contribution from UnUsUal. The cinema arm, on the other hand, helps the group to build a recurring income base. Upon completion of the latest acquisition of 13 cinemas in Malaysia, mm2 Asia would become a top four player in Malaysia.
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| UOB KAYHIAN | |
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Singapore Press Holdings (SPH SP) 2QFY17: Interim Dividend Cut To 6 S cents On Persistently Weak Media Earnings SPH reported a core net profit of S$39.4m (-19.6% yoy) for 2QFY17. Earnings were within expectations, accounting for 43% of our full-year estimate. The weakness was primarily attributable to a 16-19% drop in display and classified ad revenues. The interim dividend cut to 6 S cents from 7 S cents came as a surprise, hinting at possible cashflow strains. Advertising outlook remains gloomy, in line with the sluggish economic outlook. Maintain SELL and target price of S$3.29.
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