SPH   

SPH

That is why I mentioned that this is the right time to increase the price of all newspapers.

It depends on the wisdom of the SPH Board especially its Chairman who has a stirling background in economic affairs.

 

cab fare rise, mrt and bus fare rise, so what's next??

 

it is the common knowledge that if the price of the newspaper were to increase then the ultimate beneficiaries will be the stock holders. It does not need a rocket scientist to figure this out.

The important question is whether SPH is courageous enough to take this plunge. Before taking this bold step, SPH will have to take into consideration whether the circulation will shrink due to the increase.

Having said all these, personally I think it is the correct time to have a tiny increase of 5 cents to cover labor, material and overhead costs. I strongly believe the public will understand.

This is the testing time for SPH.

 

Possible short term trend reversal now?

 

Hi shplayer,  I agree with  chipchip66 observation.  You are fantastic - really very good with figures and analysis ! Thank you for all that you have done for us. Appreciate it.

 

chipchip66,

No, div payout in Dec will not affect eps (earnings per share)....but after payout, NAV (net asset value per share) will be reduced accordingly. As at 31 Aug 06 (FY yr end) NAV was $1.28. After div payout, NAV will be $1.11 (1.28 - 0.17)....assuming all other factors remains unchanged.



From past trends, price of SPH will probably start to trend up a week or two before the xd on 8 Dec 06 where ppl accumulate for the div. This final div is 17cts one tier tax exempt.....this is equivalent to 21.25cts less tax (17.0/0.8 - 20% tax).

 

tks shplayer, yr fundamental analysis is excellent! So if div is paid out in dec, will it affect the eps?

 

chipchip66,

I multiplied the total annual circulation of all the paying print papers by 5cts.  This figure (incremental revenue) came up to about $18m+. Divide this by issued shares and assume all other factors remain constant........you get eps from this increase.



As you know, share price depends alot on market sentiment. In Sep it was trading at about $4.04......now it is 4.18....From Sep to Oct, nothing has changed...the analysts have all made their forecasts by Sep and the recent result was in line with expectations. So, only thing that has changed  is the market sentiment.



But having said that, at current levels, SPH is trading at a historical P/E of 15X. So, if eps improves by 1.16 cts, theoretically, share price should go up by about 17cts (1.16 x 15 = 17.4)....i.e. SPH should trade at $4.35 (theoretically).



Hope this helps.

 

hi shplayer, would you be able to cal what would be the share price be now if they raise their prints by 5c with no drop in circulations? how do we use earnings per share to cal share price?

 

If SPH raises newspaper prices  for all their paid papers (ST, BT, NP, LHZB, Berita H etc....)  by 5cts, eps  will increase by about 1.16cts....assuming no drop in circulation due to price increase.

 

If they raise their newspaper prices, it just translates to more profits for SPH rite? Because they're so huge, most Singaporeans would have to take the price increase in their stride.... no choice...

So their share price will surely rise.

 

Hi Yongjiu, SPH could up their newspaper prices as they hav a big pie in the market. So, if they really announce it, I wonder how why SPH share price react???

 

Credit Suisse said it raised its target price to $4.75 from $4.70 to reflect the higher valuations of the company's assets.



It also raised its net profit forecast for the company by 1.4% to $405m  for the year to August 2007, and by 19.3% to $493m for the following year, to factor in earnings contributions from SPH's residential property development along Thomson Road. The residential development is scheduled to be launched in early 2007.



However, the brokerage said it is keeping its "neutral" rating on the stock, saying SPH lacks catalysts despite trading at an undemanding valuation.



"Fundamentally, we do not see a rebound in the core media business in the near term," Credit Suisse said in a note.

 

btw in order for SPH to generate more revenue by doing one simple thing.
"Increase Newpaper price"

any one here agree to pay 10-20cts extra everyday for your new-print??

hehe just like kopi-tiam increase the kopi price, not happy still have to drink =)

 

Overall mkt consensus is that SPH only attractive with non-core business. Story like Time Industrial Building turn to condo, Paragon "white Tiger" in Orchard, and bit here and there investment in local Telco sector.

What I feel that SPH sound bit like a garang-guni & part-time property agent that leverage on the monopoly media.

Doggie, but I hope it will continue generate more revenue in 2007.

 

1134 [Dow Jones] STOCK CALL: Merrill Lynch says will review forecasts on SPH (T39.SG) in coming weeks, keeps at Neutral with S$4.52 target price; "the redevelopment of Time Industrial Building would allow them to better leverage on the booming property market in Singapore, but the sale proceed will not kick in until 2007." Adds 4Q06 results are "hard to get excited about". Stock up 0.5% at S$4.20; but orderbook suggests stock may pare gains later in session, currently 1.3 million offers at S$4.20

 

How about SPH's 14% holding of M1 and less than 1% of Starhub? 

 

    I would think so. Personally, I agree with UOB's analysis that SPH's entry level should be around $3.90.



    Can anyone comment on the price catalyst of this counter? Property development (Not their core business)?

 

No more in my radar screen......Same thing repeating again after uninspiring result. With oil price above 50, no way can paper price be cheap. It's share price will drift to 3.90 soon....Paragon news will not be in play until IR completed.

 

so much of the wishful thinking, if the current mkt price already factor in the 17cts div, that mean the support line is still along $4.0