Singapore Press Holdings or Singapore Pseudo-retail Holdings

June 19, 2012 at 2:37 pm Leave a comment

CIMB wrote a nice report about SPH and labelled it as “pseudo retail REIT”, that’s what i thought too. However, SPH bought its retail properties at rather high prices. Anyway, with interest in community newspapers growing again after Buffett bought some, SPH stock could see better days ahead apart from being defensive. Obituary section is a cash cow monopoly for them considering an ageing society and people have no choice but to pay up.

Extracted from The Edge Singapore article
“Singapore Press Holdings is becoming increasingly like a retail real estate investment trust (REIT), CIMB Research said, noting its growing retail property arm and stable media business, as well as typical payouts of more than 90%.

While SPH’s newspaper and magazine segment is expected to remain dominant and underpin cash flows, CIMB said growth is likely to come increasingly from the firm’s retail malls.

“With a growing property arm, we do not dismiss the possibility of a spin-off or sale of assets to a REIT over the longer term,” CIMB said, adding that SPH has a strong balance sheet and limited cash-call risks.

CIMB said revenue compound annual growth rate for SPH’s “gem asset”, Paragon shopping mall in Singapore, stood at 8.3% over 2006-2011, outstripping growth for comparable assets under retail Singapore REITs.

It expected similar success for SPH’s Clementi Mall during its first renewal cycle and for Sengkang Mall on completion”

Disclaimer:I am vested in SPH


Entry filed under: Investing.

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