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
- Media EGM for the privatisation offer by Keppel Corporation (SGX:BN4) could be held in mid-Nov 2021.
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
- We reduce the effects of media spin-off and slightly lower target price for SPH REIT (SGX:SK6U). See report: SPH REIT - CGS-CIMB Research 2021-10-05: Holding Up Well. We dow downgrade SPH from Add to HOLD given the limited share price upside vs our revised target price and Keppel Corporation’s privatisation offer price of S$2.099.
- See
EING Kar Mei CFA
CGS-CIMB Research
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https://www.cgs-cimb.com
2021-10-07
SGX Stock
Analyst Report
2.11
DOWN
2.190
