@CGS_CIMB_Securities
CIMB Fundamental View Company Note (12 July 2018) - $SPH(T39.SI)
(Maintain ADD tp $2.88) - 3QFY8/18: Small wins amidst digital disruption

■ Excluding disposal gains and impairment, 3QFY18 core PATMI of S$57.3m (-14% yoy) was in line with our and Bloomberg consensus expectations.
■ Media PBT margin weaker yoy in 3QFY18, but could stabilise with better control of staff costs and increasing shift towards to e-paper to mitigate higher newsprint prices.
■ Enhanced data analytics and digital capabilities could support the growing momentum of digital circulation and ad revenue.
■ Maintain Add given FY18-20F dividend yield of 5.5% and potential catalysts from successful acquisitions of cash-yielding property assets overseas.


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@CGS_CIMB_Securities
CIMB Fundamental View Company Note (15 Oct 2018) - $SPH(T39.SI)
(Downgrade to HOLD tp $2.74) - Playing monopoly deal

■ FY18 bottomline boosted by higher investment income; media EBIT fell 9.7%
yoy, in tandem with the lower revenue.
■ We expect higher property income in FY19F, particularly from its UK PBSA
acquisition and upcoming sales launch of the Woodleigh project.
■ Downgrade from Add to Hold as we see limited upside and catalysts, with 5%
dividend yield as near-term share price support.

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@CGS_CIMB_Securities
CIMB Fundamental View Strategy Flash Note - Transaction on the cards (Singapore Strategy)
■ Keppel has announced possible transactions involving M1, KTT and SPH.
■ We think a partial stake divestment in KTT to strategic investors is more likely while privatisation could cost Keppel c.S$150m.
■ M1’s share price could react positively if there is MGO while Keppel and SPH could benefit from any stake divestment.

$Keppel Corp(BN4.SI) $M1(B2F.SI) $SPH(T39.SI)

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CIMB Fundamental View Company Note (4 July 2018) - $SPH(T39.SI)
(Upgrade to ADD tp $2.85) - Sleeping beauty awakens

■ Media’s structural weakness is largely priced in; we see a possible re-rating from earnings recovery, successful diversification and higher-than-expected dividends.
■ We upgrade SPH to Add with higher FY19-20F EPS and TP of S$2.85. Further upside could stem from media stabilising and higher asset management income.
■ Management is seeking new income source in overseas property asset management, for which we forecast 8% cash-on-cash returns, on average.
■ We expect the upcoming property sales launch to boost FY19-20F earnings by S$8m11m, based on an estimated ASP of S$1,850 psf.
■ The 3QFY18 results are due to be released on 11 Jul. We forecast that core PATMI (S$52m-57m) will be stronger qoq (on seasonality) but lower yoy by 14-20%.

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CIMB Fundamental View Company Note (14 Jan 2018) - $SPH(T39.SI)
(Upgrade to HOLD tp S$2.49) - Easing pressure

■ 1Q18 core net profit of S$57m formed 26%/27% of our/consensus full-year numbers.
■ Structural headwinds remain unabated, but we saw 1Q18 media revenue of S$174m stabilise on a qoq basis (-13.9% yoy).
■ Apart from S$11.6m retrenchment costs (which we expected) and S$15m divestment gain, there was no further impairment on SPH’s media business.
■ Share price lost 25% since the start of 2017. Upgrade from Reduce to Hold as we think the downside has largely been priced in, with c.5% dividend yield.
■ Likely to turn positive upon successful execution of strategy for media disruption.

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@CIMB_Securities
CIMB Fundamental View - Company Note $SPH(T39.SI)
(Maintain REDUCE tp S$2.38) - Under press-ure

■ FY8/17 core net profit of S$239m (-15% yoy) was within expectations.
■ One-off divestment and revaluation gains masked underlying weakness (media PBT down 42%), while total impairment climbed to S$96m in FY17.
■ SPH’s FY17 DPS of 15 Scts was below expectations and its fifth consecutive dividend cut, lowering its appeal as a dividend play.
■ Restructuring plans not only involve staff reduction, but also investments in new capabilities, and expansion of its reach and portfolio.
■ Maintain Reduce with unchanged SOP-based TP of S$2.38 as we roll forward our valuation and introduce FY20F forecasts.

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