Singapore Press Holdings Under press-ure
■ FY8/17 core net profit of S$239m (-15% yoy) was within expectations.
■ One-off divestment and revaluation gains masked underlying weakness (media PBT down 42%), while total impairment climbed to S$96m in FY17.
■ SPH’s FY17 DPS of 15 Scts was below expectations and its fifth consecutive dividend cut, lowering its appeal as a dividend play.
■ Restructuring plans not only involve staff reduction, but also investments in new capabilities, and expansion of its reach and portfolio.
■ Maintain Reduce with unchanged SOP-based TP of S$2.38 as we roll forward our valuation and introduce FY20F forecasts
Venture Corp: Strong growth momentum to continue
Spackman Entertainment Group
Transforming Through Acquisitions
Spackman has announced the acquisition of Take Pictures for a total consideration of SGD3.9m, payable via SGD0.59m in cash and the issuance of 25.7m new Spackman shares at a premium price of SGD0.13/share. It also bought back SMG stock at USD3/share, for a total of USD2.7m, payable by issuing 28.45m new Spackman shares, also at SGD0.13/share. With the expected dilution, our TP dips to SGD0.20 (from SGD0.23, 67% upside). However, with its greater capacity to produce more movies coupled with the strong pipeline of new movies to be launched in 2018, we maintain our BUY call on the stock.
StarHub (STH SP)
Bulking Up With Broader Capabilities
StarHub has strengthened its post-paid mobile plans with unlimited data over weekends. iPhone X would be available on 3 November but would result in higher handset subsidies in 4Q17 and 1Q18. The revamped leadership and acquisition of Accel Systems & Technologies would strengthen growth at the Fixed Enterprise Group. Maintain HOLD. Target price: S$2.62. Entry price: S$2.38.
Check out our compilation of Target Prices