Singapore Press Holdings (SPH) - CGS-CIMB Research 2021-10-07: Building Up PBSA & Aged Care Portfolio

SINGAPORE PRESS HLDGS LTD (SGX:T39) | SGinvestors.io SINGAPORE PRESS HLDGS LTD (SGX:T39)

Singapore Press Holdings (SPH) - Building Up PBSA & Aged Care Portfolio

  • SPH reported strong FY21 core PAT (+74% y-o-y), thanks to higher margins.
  • SPH acquired another 2 PBSA assets in UK and is in the midst of acquiring an aged care asset in Japan to build up its asset management capability.
  • Reduce target price to factor in media spin-off. Downgrade SPH to HOLD on limited upside.



SPH's 1HFY21 core net profit jumped 85% y-o-y on better margins

  • Singapore Press Holdings (SPH, SGX:T39)’s FY21 group operating revenue (exclude media) grew by 7% y-o-y to S$449.9m, driven by full-year contribution from the acquisition of Westfield Marion and Student Castle in Dec 2019, low er tenant rental relief, and contribution from its Japan nursing homes portfolio.
  • SPH's operating profit jumped 69.8% y-o-y to S$206.7m due to lower operating expenses, lower finance cost, the turnaround of its aged care business and higher margin from PBSA on higher occupancy and room rates as w ell as cost savings from integrating operational capabilities in-house. This, coupled with the higher net income from investment, boosted SPH's core net profit by 74% y-o-y to S$202m, which formed 85% of our full-year forecast as we overestimated its margins and underestimated its tax expense.
  • SPH declared a full year dividend of S$0.06, in line with our FY21F dividend forecast.


Media restructuring completed; EGM for privatisation in mid-Nov



Building up its asset management capability

  • SPH will continue to remained high at > 90% in FY21 while Orange Valley’s rose from 77% last year to 84% this year.


Downgrade SPH to HOLD with a lower SOP-based target price






EING Kar Mei CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-10-07
SGX Stock Analyst Report HOLD DOWNGRADE ADD 2.11 DOWN 2.190



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