Brokers' Take
Singapore Press Holdings
Sept 28 close: $4.64
29 September 2005
The Business Times
CREDIT SUISSE FIRST BOSTON, Sept 27
LAST week, the CSFB economics team raised its 2005 and 2006 Singapore GDP (gross domestic product) growth forecasts to 4.6 per cent and 5 per cent. Taking the view that a sustained recovery in consumer spending is likely to gather pace in 2006, we also raised our 2006 private consumption growth forecast to 5.6 per cent from 5.2 per cent. Given the strong historical relationship between SPH's newspaper display ad revenue growth and Singapore's economic and private consumption growth, we have raised our FY06E net profit forecast by 8.4 per cent to $386 million. This is 3 per cent above consensus estimates. In turn, we also raised our DCF-based (discounted cash flow) target price by 7.5 per cent to $4.76. We expect the stock's recent re-rating on the back of potential positive dividend surprise when the company releases its full year results on Oct 11 to continue. This implies a full-year net dividend yield of 6.3 per cent (and 4.8 per cent just for the finals). We maintain our 'neutral' rating with a 12-month $4.76 target price.
NEUTRAL Compiled by UMA SHANKARI |
