SPH

SPH: Results in-line, although at the low end of estimates. Grp reported a 6.6% fall in net profit to $91.1m for 1Q13. This was mainly due to a $6.2m dip in rev from its newspaper and magazine business, and a $5.4m dip in revenue for its "others" segment mainly due to shows in the exhibitions business being held on different dates in the periods of comparison. EBITDA margins declined to 42.1% vs. 44.2% in 1Q12 as advertising expenses rose on account of new website launches. On the property front, grp note that operations remained stable and was largely in line with our expectations. Rental income rose 3% YoY to $48mn (15% of group rev) on the back of higher contributions achieved by Paragon; income from Clementi Mall was comparatively flat YoY. Paragon and Clementi Mall are both fully leased and the group’s third mall (Seletar Mall) is expected to be completed at the end of 2014. Going forward, grp note that the yr ahead will be challenging. Given the uncertain economic times and the changing media consumption trends, grp will monitor cost structure carefully for a sustained performance in its core newspaper business. Overall fundamentals remain strong, with Current yield stands at 5.8% & grp currently trades at approx. 17x forward P/E, with a low net gearing of 19.9% Ratings as follow: Citi maintains Sell with $3.80 TP CIMB downgrades to Neutral with $4.11 TP CLSA maintains O/p with $4.35 TP CS maintains Neutral with $4.50 TP DMG maintains Neutral with $3.80 TP Deutsche maintains Hold with $4.17 TP. Maybank-KE maintains buy with $4.50 TP UOB Kay Hian maintains Hold with $4.30 TP