SPH : 4 reasons to avoid

RFTrader
2021-05-23

After the initial gap down after the restructuring announcement, $SINGAPORE PRESS HLDGS LTD(T39.SI)$ has since closed the gap and moved back to the pre-announcement price level.

Is this gain sustainable?

I remained unimpressed by SPH for 4 key reasons:

1) SPH is not just giving away it media business for free. It is, in fact, throwing away S$110 mil in cash, SPH and SPR REIT shares to get rid of the media business.

2) Transaction is NAV dilutive, dropping from S$2.24 per share to S$2.08 per share. Gearing will rise from 30.9% to 32.4%.

3) Lack of confidence in management. The poor handling of media question and attitude of senior management is a good indication of how things are being run in the company.

4) Lack of an impressive track record in real estate thus far.

What should be a fair value for SPH?

Considering that large-cap Singapore RE companies are trading at Price-NAV of 0.8x, I would give SPH a higher NAV discount and hence, lower Price-NAV of 0.7x. This implies a fair value of S$1.46 per share.

Chart-wise, SPH managed to fill the gap last Friday but is showing a weak candlestick and closed near the day’s low. A long red candle confirmation on Monday could indicate a reversal and correction in share price.

Trade with care and DYODD.

免责声明:上述内容仅代表发帖人个人观点,不构成本平台的任何投资建议。

精彩评论

  • SPOT_ON
    2021-05-25
    SPOT_ON
    SPH being a pure property play now trading at around $1.80... is much much more expensive now compared to FRASER PROPERTY trading at around 0.4x book value/nav only ....
  • SPOT_ON
    2021-05-25
    SPOT_ON
    FLCT has proposed to acquire freehold properties in Germany, Netherlands and UK for an agreed price of S$548.7m it will be injected into the FLCT (Reit) by sponsor Frasers Property.
  • SPOT_ON
    2021-05-25
    SPOT_ON
    sph only has sph reit all sg based wherelse under frasers property has properties spanning all over the world in logistic , hospitality and retails malls
  • hydros
    2021-05-25
    hydros
    good read. I will go for  undervalued  property stocks if I want value and reits if I want dividends.  sph is neither to me.
  • Trainman
    2021-10-29
    Trainman
    it should maintain its core value
  • Klub77
    2021-05-24
    Klub77
    Will avoid this stock
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