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SPH: Interim dividend of 7c per share.

Saturday, April 21, 2012

SPH remains my largest investment in a blue chip. Over the years, it has been very good to me. Last year, I had hoped to buy more SPH shares if price should dip to $3.60 a piece but it never did.

Clementi Mall.

Singapore Press Holdings’ (SPH) 2QFY12 PATMI came in at S$83.9m, or 5 S-cents per share, which was 16% higher YoY. 1HFY12 PATMI now make up 46% of our full year forecast, falling short mainly due to lower investment income.

2QFY12 topline was S$298.5m - in-line with our expectations - and making up 50% of our full year forecast. An interim dividend of 7 S-cents was declared.

We continue to view SPH favorably as it continues to ramp up on its retail mall strategy - a stable counterweight to its print business going forward. Group investible funds currently stand at S$0.9bn, which points to sufficient capacity for further allocation into its retail strategy ahead.

Maintain BUY with a higher fair value estimate of S$4.05 (versus S$3.99 previously) mostly due to stronger assumptions for Clementi Mall.

Source: OCBC Research, 16 April 2012.

12 comments:

lokster said...

yup, i am still waiting for SPH to drop but it hasnt gone a bit down!

am also waiting for Starhub and Singtel to drop as well.

AK71 said...

Hi lokster,

Some of the best investors spend most of their time waiting. ;)

Temperament said...

Hi AK71,
SPH changes its price very slowly. But was very suprised during 2008/2009 it dropped below $2.50. A ten-year historical low. So people waitng to buy really must be patient. i am one of them.
Don't see prices changes much as its a "stable Blue Chip" counter.
In fact now i am trying to sell, albeit slowly.

AK71 said...

Hi Temperament,

Yes, I remember buying some during the Lehman Brothers crisis.

I even used my CPF-OA to buy some. Divested those for capital gains.

What I have now, I am holding for long term passive income generation. Unless its share price goes through the roof (and that is open to interpretation), it is unlikely that I would sell any. :)

FoodieFC said...

$3.6? I wanted to go in at $3.5 which it never reached haha.

What's your take on SPH in the long run? Their core business is not doing very well. and they have jump into the property wagon

lokster said...

hi AK71,

I have bought CACHE after it has XD not long ago. been looking at bluechips and reits but the prices are not attractive.

did i miss out any "great offers" or you guys are also waiting for the offers to come?

INVS 2.0 said...

Hi Ak71,

Is Singpost a blue chip? I have been keeping an eye on its since its downtrend started weeks ago.

AK71 said...

Hi FoodieFC,

The print business is under threat from the internet but that is where SPH has to re-invent itself. I think deriving a larger portion of its income from rental (i.e. from Paragon and Clementi Mall) is also the right thing to do. If it should stick to its print business and not do anything else, I would be worried.

AK71 said...

Hi lokster,

If there is nothing worth buying, then, there is no need to buy anything. ;)

AK71 said...

Hi INVS 2.0,

Yup, Singpost is a blue chip. Hope you get in at a price you are happy with. :)

Jack said...

Hi AK71,

Thanks for your great insights on REITs. I've benefited from some of your advices. Needless to say, I've visited your sponsors. :)

You said you will consider to sell your SPH if it's price goes through the roof. My question is how high is considered worthwhile to sell?

For eg, if a stock generates 10% return annually, and it's price have went up by 30% of your purchased price, selling it means you will get 3 years worth of dividends without actually waiting for that long.

AK71 said...

Hi Jack,

Thank you very much for visiting my sponsors. ;)

For a blue chip like SPH, even if the dividend yield should fall to 5%, it would still be good enough to hold. Perhaps, if its dividend yield were to fall to 3%, I might consider selling. ;p

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