Better prospects for Singapore Press Holdings’ (SPH) property assets, such as the separately-listed SPH REIT, have prompted UOB Kay Hian Research analyst Lucas Teng to upgrade his rating for the stock to ‘buy’ with a higher target price of $1.74 from $1.22 previously.

His increased target price factors in higher dividend payout ratios for FY2021 to FY2023 ending August as well as a lower conglomerate discount assumption of 10% from 30% previously.

Teng notes that SPH REIT’s 1HFY2021 ended February distribution per unit (DPU) grew 45% y-o-y to 2.44 cents. He believes that retail operations have largely stabilised and as such, there is potential for dividends to be reinstated to a larger extent at SPH’s level after FY2020 saw SPH declare dividends of only 2.5 cents per share to conserve cash.

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