Analysts from CGS-CIMB Research and DBS Group Research have maintained their “hold” calls on Singapore Press Holdings (SPH) after the publisher and property investor reported its full-year results on Oct 13.

For FY2020 ended Aug 31, 2020, SPH reported a loss of $83.7 million reversing earnings of $213.2 million a year ago, largely caused by a non-cash fair value charge of $232 million on its properties due to the impact of Covid-19.

See: Covid-19 related writedown sends SPH into red ink of $83.7 mil, dividend slashed

The group also declared a final dividend of 1 cent, bringing total distribution per share (DPS) to 2.5 cents for FY2020, which fell short of CGS-CIMB analyst Ngoh Yi Sin and DBS analysts Alfie Yeo and Andy Sim’s expectations.

The pandemic disrupted the group’s major business segments, including its media business, which was affected by the “collapse in advertising”, according to SPH CEO Ng Yat Chung.

On that, CGS-CIMB’s Ngoh has slashed her target price to $1.10 from $1.35 previously, which is pegged to “30% group discount (previously 25%) and includes 21 cents per hour worth of media business”.

For Ngoh, her sum-of-the-parts (SOP)-based target price is pegged to “30% group discount (previously 25%) and includes 21 cents per hour worth of media business”.

She has also cut her earnings per share (EPS) estimates for FY2021 to FY2022 by 11.1-18.4% to reflect “further pressure on media earnings and a gradual recovery in retail malls”.

Despite the red ink, Ngoh thinks all is not lost for the group yet, as most of the negative news have been “largely priced in at 0.45x FY2020 price-to-book value (P/BV)”.

DBS’s Yeo and Sim have similarly cut their target price on the counter to $1.09 from $1.26.

Like Ngoh, they have also pared down their earnings estimates for FY2021 and FY2022 by 7-18% as they expect the company’s weak advertising expenditure (adex) to persist till FY2021 with the slow recovery of Singapore’s GDP.

Nonetheless, the analysts say they see SPH’s property arm driving growth in earnings in the longer term, which may contribute to better margins for the group in FY2022.

“We expect UK purpose-built student accommodation (PBSA) to drive earnings growth in FY2021F. We value the core newspaper and magazine operations at 16 cents/share based on discounted cash flow model, properties and other investments at $1.89, and net cash and investments at -96 cent,” they say.

The OCBC research team has also whittled down its fair value estimate to $1.05 as they “incorporate expectations for a more gradual recovery outlook”.

The team previously gave SPH a “sell” recommendation on April 8. Since then, SPH’s share price has underperformed the benchmark Straits Times Index (STI) by some 31%, which underscores the team’s advice to switch to the more stable Netlink Trust.

“This switch idea was again reiterated on 14th July, which has been underscored by SPH’s share price underperformance of 16% vs the STI index,” it says.

“Looking ahead, we expect the group to continue focusing on effective cost controls and prudent capital management, while selectively investing in key areas identified such as data analytics and personalized content recommendations for subscribers to help navigate the current soft advertising market conditions,” it adds.

Shares in SPH slid further as it closed 5 cents lower, or 4.8% down at $1 on Oct 14. The price has more than halved since the beginning of 2020, and represents a 52-week low.